A woman walks past the Taiwan Stock Exchange's display of global financial markets in Taipei on Monday. CNA photo Jan. 29, 2024
Taipei, Jan. 29 (CNA) Consumer confidence in Taiwan hit a two-year in January driven by a booming local stock market, according to a survey released by National Central University (NCU) Monday.
The survey conducted from Jan. 18-21, showed that the local consumer confidence index (CCI) rose 2.08 points from a month earlier to 72.14, the highest level since March 2022, when the CCI stood at 72.24, NCU said.
It was also the fourth consecutive month-over-month rise, NCU added.
According to NCU, the CCI gauges the level of confidence people have toward employment prospects, family finances, consumer prices, the local economic climate, the stock market, and the likelihood of purchasing durable goods over the next six months.
In January, the subindexes on the six factors of the CCI all moved higher, the survey found.
NCU said the subindex on the stock market rose 5.54 points from a month earlier, the largest growth among the six factors, to 56.68 in January, a new high since February 2020, when the subindex hit 65.50.
At a news conference, Dachrahn Wu (吳大任), director of NCU's Research Center for Taiwan Economic Development, said the local stock market had steamed ahead in recent sessions led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC).
At an investor conference on Jan. 18, TSMC said its sales for 2024 are forecast to grow 21-26 percent from a year earlier, due to its lead over its rivals in advanced technology development, beating a market expectation of a 20 percent year-on-year increase.
On Jan. 19, shares of TSMC, the local market's most heavily weighted stock, soared NT$38.00 (US$1.21), or 6.46 percent, pushing up the Taiex, the weighted index on the Taiwan Stock Exchange, by 2.63 percent in a single session.
With TSMC shares on the rise and investor enthusiasm for artificial intelligence development, the Taiex jumped over the high technical resistance to close at 18,002.62 on Jan. 25, the first time since Feb. 23, 2022's 18,055.73 points that the index closed above 18,000 points.
Judging from the January survey, Wu said, consumer confidence in the local stock market had returned to a level before the breakout of the COVID-19 pandemic, which helped to boost overall consumer confidence back to a level before a war between Russia and Ukraine broke out and high inflationary pressure started affecting the global economy.
"When the stock market moved higher to allow investors to bag gains, it was no surprise that other factors in the CCI as well as the whole CCI improved accordingly," Wu said.
In January, the subindexes on employment, family finances, and the local economic climate moved higher by 1.92, 1.85 and 1.61, respectively, from a month earlier to 69.24, 78.5 and 82.94, according to the survey.
In addition, the subindexes on consumer prices and purchases of durable goods such as homes and cars, and furniture, also rose 1.41 and 0.15, respectively, to 31.37 and 112.08 in January, the survey found.
According to the university, the January sub-index on buying of durable goods hit a new high since May 2022, when the sub-index reached 114.80.
In the NCU surveys, a CPI sub-index score of 0-100 indicates pessimism, while a score of 100-200 shows optimism, the university said, noting that the only factor that showed optimism in January was the likelihood of purchasing durable goods over the next six months.
Meanwhile, another NCU survey conducted jointly with Taiwan Realty showed a month-on-month increase of 0.52 points in January in the index for home buying, which stood at 106.13, the highest since August 2022, when the index stood at 106.95.
While the CCI and its six factors all improved in January, Wu cautioned the global economy remained bothered by uncertainties, which could impact Taiwan's export momentum this year.
The university's CCI survey in December collected 2,984 valid questionnaires from consumers in Taiwan 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.
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