Sen­ti­ment de­flated by slow­ing global econ­omy: sur­vey

The China Post - - BUSINESS -

In­vestors’ sen­ti­ment to­ward the lo­cal econ­omy has been af­fected by a slower pace of growth in the global eco­nomic re­cov­ery push­ing down the April eco­nomic op­ti­mism in­dex, ac­cord­ing to Cathay Fi­nan­cial Hold­ing Co. ( ).

Cathay Fi­nan­cial cited a sur­vey, which gen­er­ated the eco­nomic op- timism in­dex for April, say­ing that a fall in Tai­wan’s ex­ports dealt an­other blow to sen­ti­ment to­ward the lo­cal econ­omy.

The sur­vey showed that 37 per­cent of re­spon­dents agreed that the lo­cal econ­omy will im­prove over the next six months, while 19.3 per­cent thought that the lo­cal econ­omy will worsen over the next six months. The data trans­lated into an April eco­nomic op­ti­mism in­dex of 17.7, down from 25.6 recorded in March.

The In­ter­na­tional Mon­e­tary Fund has cut its growth fore­cast for the U.S. econ­omy, the largest in the world, to 3.1 per­cent from 3.6 per­cent. China’s econ­omy, the world’s sec­ond largest, grew only 7 per­cent in the first quar­ter of this year, the slow­est pace in six years.

In the Jan­uary-March pe­riod, Tai­wan’s ex­ports fell 4.2 per­cent from a year ear­lier to US$70.25 bil­lion (NT$2.18 tril­lion).

Cathay Fi­nan­cial said that de­spite a fall in the April eco­nomic op­ti­mism in­dex, the fig­ure re­mained in pos­i­tive ter­ri­tory, in­di­cat­ing that more in­vestors held a pos­i­tive at- ti­tude to­ward the econ­omy than those who ap­peared down­beat.

The fi­nan­cial hold­ing com­pany said that due to a plunge in in­ter­na­tional crude oil prices and the launch of Ap­ple Inc.’s lat­est iPhone mod­els, listed com­pa­nies on the lo­cal mar­ket posted a 17 per­cent year-on-year in­crease in profit in 2014, which has pro­vided a boost lo­cal share prices.

The sur­vey showed that 29.4 per­cent of the re­spon­dents ex­pected lo­cal shares will move higher over the next six months, com­pared with 27.5 per­cent, who an­tic­i­pated that the weighted in­dex on the bourse will fall over the next six months.

Ac­cord­ing to the sur­vey, 20.9 per­cent of the re­spon­dents ex­pected wages to in­crease over the next six months, while 11.4 per­cent thought that salaries will be cut over the next six months.

The sur­vey was con­ducted via from April 1-7 by email to cus­tomers of Cathay Life In­sur­ance Co. ( ) and Cathay United Bank (

). The fi­nan­cial hold­ing com­pany col­lected 31,034 valid ques­tion­naires.

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