By Crystal Hsu / Staff reporter
Taiwanese consumers became more cautious this month, with confidence in stock investing falling to a more than three-year low despite a continued rally in local equities, as many investors viewed the market as overheated, a survey released yesterday by National Central University showed.The university’s Research Center for Taiwan Economic Development said its consumer confidence index edged down 0.39 points from a month earlier to 62.08Of the index’s six sub-indices, only sentiment toward consumer prices improved, while confidence in household finances, Taiwan’s economy, employment opportunities, stock investment timing and purchases of durable goods all weakened, the survey showed.
People walk at Daan Forest Park in Taipei on Saturday last week.
The sharpest decline came in sentiment toward the timing to invest in stocks over the next six months, which fell 1.03 points to 22.06, the lowest level since February 2023.Research center director Dachrahn Wu said the decline did not indicate that people had lost confidence in equities, but that many believed current valuations made the market unattractive for new positions.
“From an investment perspective, when asset prices become expensive, people don’t see it as a good entry point,” Wu said. “Many investors are waiting for a concrete market correction before re-entering.”Wu attributed the slight improvement in price sentiment to the government’s decision to freeze electricity and fuel prices, as well as stable fruit and vegetable supplies.Although some daily necessities and energy-related items have become more expensive due to the US-Israeli war on Iran, Taiwan’s consumer price index has remained below the central bank’s 2 percent alert threshold, while favorable weather conditions helped ease produce prices, he said.The survey showed that sentiment toward buying real-estate deteriorated, falling to the lowest level since June 2020.Wu said the decline reflected a shift of household funds into the stock market, as repeated rallies in the TAIEX attracted buyers away from property purchases.Daily turnover on the local main board has frequently approached NT$1.5 trillion (US$47.74 billion), with some families redirecting down payments originally intended for housing purchases into equities, contributing to weaker housing transactions, he said.Wu said that the market has shown signs of overheating, with day trading accounting for nearly 38 percent of turnover — indicating heightened speculation that could increase volatility and correction risks.The survey was conducted by telephone from Monday to Thursday last week, covering 3,346 respondents aged 20 or older across Taiwan, with a margin of error of 2 percentage points at a 95 percent confidence level.
