Taipei-Consumer confidence in Taiwan surged in August on a strong equity market as the weighted index ended above 10,000 points in almost 70 sessions, according to a survey released Monday by National Central University (NCU).
The survey showed that the local consumer confidence index (CCI) rose 1.76 points in August from a month earlier to 79.95, while the sub-index for timing to enter the equity market over the next six months surged to two-year high of 92.70 points, up 2.40 points from the previous month.
NCU said the CCI was boosted by the performance of the equity market, which breached the 10,000 mark in mid-May for the first time in 17-years and continued to gain momentum on the back of strong foreign institutional buying in large-cap high-tech stocks such as contract chip maker Taiwan Semiconductor Manufacturing Co. .
On Monday, the weighted index closed above 10,000 points for the 69th session, ending 0.10 percent higher at 10,525.98 and recording its longest ever period above that level.
Dachrahn Wu, director of the NCU's Research Center for Taiwan Economic Development, said that after the first two months of the market's sustained gains, investors became more willing to buy new stocks, which helped lift the sub-index for equity investments to a two year high.
The CCI comprises six sub-indexes that reflect how much confidence people have in consumer prices, employment, family finances, local economic climate, the stock market, and the possible purchase of durable goods over the next six months.
The monthly increase in August of the sub-index on equity investments was the highest among the six.
Meanwhile, the sub-index for family finances increased 2.25 points to 79.15, while that for the local economic climate rose 2.20 points to 73.75, and the index for willingness to purchase durable goods climbed 1.95 points to 86.60.
The employment sub-index rose 1.85 points to 101.80, while the sub-index for local consumer prices fell 0.10 points to 45.70.
According to NCU, a sub-index score of between 0 and 100 indicates pessimism, while a score of between 100 and 200 indicates optimism.
Therefore, the results showed that despite the increases, only the employment sub-index indicated optimism over the next six months, the university said.
The survey, conducted Aug. 19-23, collected 2,537 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: Overseas Community Affairs Council