Consumer confidence up but optimism on stocks down

Taipei-Overall consumer confidence improved in October on stronger domestic demand for durable goods, but investors' faith in the stock market moved lower, a survey released by National Central University (NCU) showed Monday.

According to NCU, the Consumer Confidence Index (CCI) for October rose 0.11 points from a month earlier to 80.97 with the sub-index on the likelihood of purchasing durable goods over the next six months up 3.15 from September to 105.4.

The CCI consists of six factors that reflect public confidence in employment, family finances, consumer prices, the local economic climate, the stock market and the likelihood of purchasing durable goods over the next six months.

Dachrahn Wu (???), director of the research center, said the strong growth in the sub-index on durable goods purchases comes as more Taiwanese companies that operate overseas return home to invest to avoid punitive U.S. tariffs on goods made in China.

Wu said the ongoing chaos triggered by pro-democracy protests in Hong Kong has also led some in Hong Kong to invest in real estate in Taiwan, which could also boost demand for durable goods.

The latest sub-index on durable goods purchases hit its highest level since July 2015, when the figure was 105.45.

The sub-index on the timing to invest in the stock market fell 3.5 from a month earlier to 61.6 in October, the lowest level since June when it was 58.60, the survey showed.

Wu said Taiwan's stock market has posted strong gains in October, leading to concerns over a possible major pullback that has made many investors cautious about future market movements.

As of Oct. 19, when the October CCI survey began, the benchmark index on the Taiwan Stock Exchange had risen 350.54 points, or 3.24 percent, in October.

In addition, Wu said, economic data at home and abroad reflected global trade uncertainty, which may have led investors to want to lock in gains, pushing down the CCI's stock sub-index.

Among the six CCI factors, the sub-indexes for consumer prices, the local economic climate and family finances rose 1.5, 0.95 and 0.65, respectively, from a month earlier to 52.75, 87.30, and 91.15 in September, the survey showed.

The survey found, however, that the sub-index on employment fell 2.1 from a month earlier to 87.6 in September, its lowest level since October 2010, when it hit 87.20.

That result reflected ongoing trade friction between Washington and Beijing that has hurt global demand and Taiwan's export-oriented manufacturers, leaving them more reluctant to hire workers, Wu said.

A sub-index score of 0 to 100 indicates pessimism, while a score of 100-200 indicates optimism.

In other words, the university said, survey respondents were only optimistic about purchases of durable goods among the six factors over the next six months.

The survey, conducted from Oct. 19 to 23, collected 2,832 valid questionnaires from local consumers aged 20 and over. It had a confidence level of 95 percent and a margin of error of plus or minus 2.0 percentage points.

Source: Focus Taiwan News Channel