Over 26% of workers incurred losses despite equity boom: poll

2018/04/14 13:06:42 fontsize-small fontsize-default fontsize-big
Over 26% of workers incurred losses despite equity boom: poll

Taipei, April 14 (CNA) More than 26 percent of office or factory workers who poured their funds into the local equity market incurred losses, even though the benchmark weighted index on the Taiwan Stock Exchange (TWSE) or Taiex have stood above the 10,000 point mark since May 2017, according to a survey released by yes123 online job bank.

The survey found 26.5 percent of respondents investing in equities said they either suffered losses from equity investments on their books or had closed their books by disposing their holdings to stop losses. This indicated nearly one third of employees have failed to enjoy the current booming equity market.

The Taiex closed above the 10,000 point mark last May for the first time in 17 years and continued to remain above that level since then, marking the longest period in history for the local main board to end above 10,000 points.

In the first quarter of this year, the Taiex rose 276 points or about 2.6 percent after a 15 percent jump in 2017. On Friday, the main board closed little changed at 10,965.39 points.

At the same time, about 38.2 percent of the respondents surveyed said they have posted gains on their books or have locked in profit from the booming market, while 35.3 percent of them said they have neither made profit nor incurred losses, the survey showed.

It indicated the average return of these polled employees even stood at around minus 2.5 percent, which presented more evidence showing employees who have equity investments failed to enjoy the trickle-down effects from the gains posted by the Taiex.

Market analysts said the major beneficiaries of the on-going booming equity market have been institutional investors instead of retail investors, like office or factory workers, since large-cap stocks which tend not to be affordable to retail investors have served as the driver of the market's current upturn.

Analysts said institutional investors, in particular foreign ones, have held a major stake in the major electronics firms, such as the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. According to the TWSE, foreign institutional investors owned a 78.77 percent stake in TSMC as of Friday.

The survey also found that to raise their income and save more for their pensions, 85 percent of the respondents said they have engaged in a wide range of investments such as buying equities, mutual funds, insurance policies or placing their money in time deposits.

yes123 said that the survey was conducted during March 14-30, collecting 1,323 valid questionnaires with a confidence level of 95 percent and a margin of error of plus or minus 2.69 percentage points.

While retail investors lamented their poor investment returns in the survey, the TWSE still touted the local main board's healthy fundamentals, saying the Taiex is expected to sustain its gains.

The exchange said the 884 firms listed on the local main board posted NT$29.79 trillion (US$1.02 trillion) in combined sales for the first quarter of this year, up 6.77 percent from a year earlier, while their aggregate profit before tax even increased 16.24 percent to NT$2.57 trillion.

As the local main board has kept steaming ahead, the TWSE said, the average daily turnover stood at NT$104.87 billion in 2017, up 35.28 percent from a year earlier with more and more local investors jumping onto the trading floor.

(By Chiu Po-sheng, Tien Yu-pin and Frances Huang)

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