Taiwanese investor sentiment has plummeted over the past two months, as a result of a lackluster stock market performance and rising inflationary pressure, a poll reported yesterday.
Nearly 75 percent of investors suffered losses in the market after the new government took office, with the optimum index dropping to minus 61.31 points this month from 102.37 in April, the largest decline since December 2003, when the bi-monthly survey by the Chinese-language weekly Business Today magazine and Shih Hsin University was first conducted.
The optimum index is a reading used to gauge market sentiment. A positive figure indicates the level of optimism, whereas a negative figure indicates the level of pessimism.
“The huge decline in investor confidence this month is mainly as a result of the fact that April’s index was too high [the second-highest level on record]. Because investors’ expectations [of the new government] were too high, it also led to greater disappointment,” Kuo Nai-fong (郭迺鋒), an associate professor and chair of the finance department at Shih Hsin University, said at a press conference yesterday.
When asked whether investors would be able to reach their investment goals within the next three months, the level of optimism plunged to minus 55.5 points this month from 70.7 in April [the highest level on record], indicating that investors turned pessimistic about their investments in the short term, the survey showed.
In regard to the impact of commodity prices on the stock market over the next three months, the optimism level dropped to the lowest level of minus 76.1 points this month, from minus 10.2 in April, which implies that investors generally believe that commodity prices will continue to rise.
“The rise in commodity prices is a given fact, but the question remains whether the government can effectively eliminate the public’s anticipation of rising commodity prices,” Kuo said, adding that he expected the central bank to raise its benchmark interest rate by another 0.25 percentage points today to combat inflationary pressure.
Over the next two months, 44.93 percent of survey respondents said inflation would become the main factor affecting the local bourse, followed by movement of foreign capital and weakening US economic fundamentals, at 16.68 percent and 9.1 percent respectively, the survey showed.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
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