Taiwan's investor sentiment for December plunged to the second-lowest level in the past four years as confidence collapsed amid recent fluctuations in global stock markets and domestic political uncertainties, according to the results of a bimonthly survey released yesterday.
The results showed that Taiwan's investor sentiment index nosedived 102 points from October to stand at -104.7 in December, the second-lowest level since the survey started in December 2003. The lowest level was recorded in October 2005 at -109.4.
Also falling in December were investors' optimism about achieving their investment targets over the next three months, maintaining their present income over the coming year, the stock market outlook over the next three months, the unemployment rate over the next three months, and consumer prices over the next three months.
The survey was conducted by Shih Hsin University in cooperation with Business Today magazine on 1,119 stock investors December 10-20. It has a margin of error of 3 percent.
The survey revealed that the outcome of the March 22, 2008 presidential election will affect the trading decisions of the investors.
Compared with 41 percent of respondents who said they will increase their stock purchases if opposition Kuomintang candidate Ma Ying-jeou is elected, 42 percent said they will reduce the number of stocks they own if ruling Democratic Progressive Party candidate Frank Hsieh is elected, according to the results.
The survey found that the largest number of respondents believe that the relations between the ruling and opposition parties are the most important factor that will affect the movement of Taiwan's main stock index over the next two months. Other major factors mentioned include the movement of international stock markets, the development of the U.S. subprime mortgage financial crisis, and cross-Taiwan Strait relations.
Meanwhile, the results showed that 86 percent of respondents will invest in mutual funds in 2008, with over 50 percent preferring those targeting Asian emerging markets. The second-most popular type of mutual funds are those targeting European markets and Latin American markets.