Retail Savings and Investments in Taiwan - Coronavirus (COVID-19) Sector Impact

Retail Savings and Investments in Taiwan - Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with most of the countries across the world registering declines in their economic growth for the year to date. Many economists and institutions have cut their forecasts as a number of countries officially slipped into recession in Q1 2020.

Despite its close proximity with China, Taiwan’s robust measures have effectively contained the virus - with the country reporting just over 480 confirmed cases and seven deaths. The island nation has not imposed any lockdown, but its significant trade exposure to China is hurting its economy. The central bank has lowered the country’s GDP growth forecast for 2020 to 1.52%, down from the previous estimate of 1.92%, due to a decrease in domestic consumption and exports in the first half of the year. However, as the country moves towards normalization, a gradual recovery will be seen in the second half of the year.

This report focuses on the impact of the coronavirus outbreak on the Taiwanese economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts GlobalData’s pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

  • Taiwan’s retail savings and investments are forecast to mostly remain stagnant over the course of 2020 due to the economic impacts of COVID-19, but strong economic fundamentals and an effective handling of the crisis will see growth bounce back to 8.0% in 2021. Although the country’s flagship index grew pasts its pre-COVID-19 level between April and July, investor confidence remains weak due to uncertainties regarding a rebound of global economic activity, as many economies are already experiencing a second wave of virus infections. Retail equity and mutual fund holdings are expected to take the brunt of the economy’s slowdown, with respective declines of 18.5% and 12.2% anticipated in 2020.
  • Retail deposits and bond holdings are set to fare better than initially expected courtesy of a flight to safety away from risk assets. According to the Central Bank of the Republic of China (Taiwan), household savings saw positive growth in the first six months of the year, with demand deposits rising by 5.6% between January and June 2020. However, more pronounced declines in risk asset holdings mean our total retail holdings forecast for 2020 is 3.0 percentage points lower than before the onset of COVID-19.
  • HNW wealth is forecast to grow by only 0.6% during 2020. However, the effects on the different segments that make up the HNW market will be disproportionate. The healthcare sector - the largest contributor to HNW wealth - is expected to hold up more robustly, as indicated by the 6.6% increase of the Biotechnology and Medical Care Index for the year to August 3, 2020.
  • Also working in Taiwan’s favor is the tech sector, which has experienced a robust boost in high-tech device exports as the pandemic has forced people across the world to work remotely.
Reasons to Buy
  • Make strategic decisions using top-level revised forecast data on the Taiwanese retail savings and investments industry.
  • Understand the key market trends, challenges, and opportunities in the Taiwanese retail savings and investments industry.
  • Receive a comprehensive insight into the retail liquid asset holdings in Taiwan, including deposits, mutual funds, equities, and bonds.


COVID-19 Update
Impact Assessment
Retail Savings and Investments
Retail Bond Holdings
Retail Deposit Holdings
Retail Equity Holdings
Retail Mutual Fund Holdings
Appendix
Supplementary Data
Definitions
Methodology
About GlobalData
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