“Investor Confidence tumbles in Bearish Zone as
hope pinned on domestic economic growth and government’s policy.
Local political situation and fear over economic slowdown cloud sentiment.”
FETCO Press Release: Thursday, 5 November 2020
Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said investor confidence in October 2020 remained in bearish territory. The FETCO Investor Confidence Index (FETCO ICI) for the next three months fell for the third consecutive month to 61.27, or 9 percent drop from the previous month. Investors pinned high hope on domestic push to drive the economy. Government policy and fund flow followed as factors investors expected they could help shore up the market sentiment. Factors that dragged investor confidence the most was local political situation, followed by domestic economic retreat, inbound tourism and concerns over the second wave of COVID-19 spread.
Highlights of FETCO Investor Confidence Index surveyed in October 2020 are as follows:
- FETCO Investor Confidence indices across investor types for the next three months (January 2021) remain in bearish zone (40-79 of FETCO ICI Criterion) for the third straight month at 61.27
- Investor confidence of investors across investor types retreated to “bearish” zone
- Most attractive sector to investors was Food and Beverage (FOOD)
- Least attractive sector to investors was Banking (BANK)
- Most influential factor driving the Thai stock market is domestic economic growth
- Most important factor impeding the Thai stock market is local political situation
“The results of October 2020 survey showed that investor confidence across investor types slipped to “bearish” zone. Retail investor fell 2.2 percent to 78.57, proprietary trader declined 37.5 percent to 62.50 while local institutional and foreign investors receded 8.7 percent and 6.7 percent to 62.50 and 40.00 respectively.
During the first half of October 2020, SET index moved in tight range of 1,247.59—1.263.99 points before heading south in line with most stock markets across the globe following the disappointment over U.S.’ new stimulus package and soaring coronavirus infections in major countries in Europe and the United States. In addition, escalating local political tensions and the announcement of emergency decree in Bangkok dampened the local situation. At the end of October 2020, SET Index closed at 1,194.95 points, down 3.40 percent from the preceding month. However, positive factors cushioned the downside included the new appointment of Finance Minister, government’s continued stimulus package and the extension of “We Travel Together” tourism campaign, which is expected to boost domestic consumption in the fourth quarter of 2020.
Investors pinned their hope on domestic push to drive the local economy while government’s policy and fund flow were also supportive factors. However, factor that hampered investor confidence the most was local political situation, economic slowdown, inbound tourism and concerns over the second wave of COVID-19 spread.
External factors on the watch included economic direction after the U.S. presidential election, UK-EU trade agreement before the transition period ends later this year. Eyes were also on lingering local political protest and third quarter earnings results of listed companies.