“Investor Confidence remains in ‘neutral zone’

Investors expect fund inflow to boost sentiment while mounting concerns on Russia-Ukraine conflict. Interest Rate Expectation Index for BOT MPC meeting in March remains “unchanged” at 0.5%

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                                                                       FETCO Press Release: Monday, 7 March 2022

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in February, which anticipated the market condition over the next three months, is at 113.03, up 20.4 percent from the previous month and remains to “neutral” zone. The most supportive factor pinned on fund inflow, followed by Russia-Ukraine conflict to be eased, and domestic economic recovery. Investors were most concerned about Russia-Ukraine tension, uncertainties over Fed’s interest rate hike policy, followed by Euro zone economy, respectively.

Highlights of FETCO Investor Confidence Index surveyed in February 2022 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (May 2022) is in “neutral” zone (80-119 of FETCO ICI Criterion), up 20.4 percent to 113.03 from the previous month.
  • Confidence of retail and institutional investors is in “neutral” zone while that of proprietary and foreign investors is in “bullish” zone.
  • Most attractive sector to investors is Banking (BANK).
  • Least attractive sector to investors is Insurance (INSUR).
  • Most influential factor driving the Thai stock market is expectation on fund inflow.
  • Most important factor impeding the Thai stock market is concerns over Russia-Ukraine situation.

“The survey result in February 2022 shows that retail investors’ confidence falls 25.6 percent to 90.53. That of proprietary traders increases 18.7 percent to 128.57. Confidence of local institutional investors is down 24.4 percent to 94.44 while that of foreign investors rises 185.7 percent to 142.86.

In February, SET Index improved from the previous month, thanks to global investors’ plans to increase proportion of investment allocation to emerging markets. As a result, foreign investors were net buy of THB 61.34 billion. Since the beginning of 2022, foreign investors were net buyers of THB 75.57 billion. However, later in the month, SET INDEX fell sharply following the spike of Omicron variant positive cases, which triggered the government to raise its COVID-19 alert to the second-highest level. In addition, concerns over Russia-Ukraine exacerbated the sell-off. As a result, SET Index closed at end-February closed at 1,685.18, up slightly 2.2 percent from the previous month.

External factors to closely monitor include Russia-Ukraine conflict and trade and financial sanctions imposed by the U.S. and the European Union. The move would impact global economic recovery pace and mount pressure on inflation following rising oil price, especially for European countries, who mainly depend on Russia for imports of energy sources. In addition, investors keep their eyes on Fed’s move to raise its interest rate policy while Omicron variant spread especially in Asia with sharp increase of positive cases in South Korea, Japan, and Thailand, is also on the watch. For internal factors, investors follow how the government would oversee the situation where rising Omicron variant cases are ongoing. The next phase of Thailand’s tourism reopening policy and listed companies’ earnings results are also taken into consideration.”