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Investors worried over political uncertainty in Taiwan: poll

Investors worried over political uncertainty in Taiwan: poll

Taipei, Aug. 20 (CNA) Uncertainty over Taiwan's upcoming presidential election is affecting investor sentiment in the country as investors think the political situation is creating risks for the local economy, a survey on economic optimism in Taiwan showed Thursday.
Cathay Financial Holding Co., which conducted the survey earlier this month, said 35.2 percent investors think the January 2016 presidential election poses a threat to the domestic economy. Investors' concern over the political uncertainty is greater than their worry about the debt problems in the eurozone (17.9 percent) and the pace of the economic recovery in emerging markets (17.2 percent), the poll indicated.
According to the survey, 16.5 percent of Taiwan investors fear that further volatility in China's equity market will affect Taiwan's economy, while 13.2 percent are apprehensive about a possible interest rate hike by the U.S. Federal Reserve later in the year.
Regarding Taiwan's economic outlook for the next six months, 49.7 percent of local investors are downbeat, while 16.4 are optimistic, the poll indicated.
It showed an optimism index of minus 33.3 for August, a steep drop from minus 10.5 in July and the lowest level since November 2012 when it was minus 41.8, Cathay Financial said.
It said investor confidence in the local economy has been eroded by the lower-than-expected gross domestic product (GDP) growth in the second quarter of the year.
Taiwan's second-quarter GDP rose 0.64 percent from a year earlier, far short of the government's forecast of 3.05 percent, due to weaker than expected exports as global demand declined, according to July data from the Directorate General of Budget, Accounting and Statistics (DGBAS).
Taking into account Taiwan's poor economic data in the second quarter, the DGBAS on Aug. 14 cut its forecast for the country's 2015 growth from 3.28 percent to 1.56 percent.
Cathay Financial said concerns over the local economic climate has sent ripples through the local financial market and dragged down share prices.
The survey showed that 54.7 percent of local investors think Taiwan's equity market will fall over the next six months, while only 15.9 percent are anticipating a rise in share prices.
Cathay Financial conducted the survey Aug. 1-7, collecting 15,994 valid questionnaires from clients of Cathay Life Insurance Co. and Cathay United Bank, two of its subsidiaries. (By Tien Yu-pin and Frances Huang)


Updated : 2021-09-21 20:08 GMT+08:00