“Investor Confidence anticipates bullish sentiment in Q1

Investors are upbeat on fund inflow and economic growth in the country

But concerns over tourism recovery, international conflicts and new cases of COVID-19 infection weigh”

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                                                                   FETCO Press Release: Monday 11 January 2021

 

Federation of Thai Capital Market Organizations Chairman Paiboon Nalinthrangkurn revealed that the FETCO Investor Confidence Index in December 2020 showed that the index for the next three months still fared better than the 2020 average sentiment although it was cooled down to “bullish” zone, dropping 19.1 percent to 130.63 from the preceding month, where it notched up in “very bullish zone”. Investors were most upbeat by fund inflow expectation, followed by local economic growth and listed companies’ earnings. However, worries over the speed of tourism recovery undermined investor’s confidence the most, followed by international conflicts, possible economic retreat in the country as well as the new wave of COVID-19 infection.”

Highlights of FETCO Investor Confidence Index in December 2020 are as follows;

  • FETCO Investor Confidence Index for the next three months (March 2021) was in “bullish” zone (120 -159 range of FETCO ICI criterion), decreasing1 percent to 130.63 from the previous month.
  • Investor Confidence of retail and institutional investors was in “neutral” zone while that of proprietary traders and foreign investors moved down to “bullish” zone.
  • Most attractive sector to investors was Banking (BANK).
  • Least attractive sector to investors was Tourism (TOURISM).
  • Most influential factor driving the Thai stock market was fund inflow.
  • Most important factor impeding the Thai stock market was impact from tourism.

“The results of December 2020 survey showed that investor confidence across investor types declined. Retail investors fell 21 percent to 117.95. Proprietary traders decreased 23 percent to 128.57. Institutional investors retreated 24 percent to 119.05 while foreign investors slipped 14 percent to 150.00.

During the first half of December 2020, SET Index rose from the month earlier to move in 1,417—1,483 range as several countries started to roll out COVID-19 vaccination. In addition, fund inflow to emerging market especially to the Thai stock market given to its high proportion of cyclical stock base accelerated the run. As a result, foreign investors turned to continuously become net buyers. However, the index fluctuation in the latter half of December was impacted by the concerns over the new wave of COVID-19 spread in Thailand. SET Index closed at 1,449.35 at the end of December, up 2.9 percent from the previous month.

Investors bargained for fund inflow as the most supportive factor, followed by growth in domestic economy and listed companies’ earnings. However, factors standing in the way included the speed of tourism recovery, international conflicts, local economic retreat and new wave of COVID-19 spread.

Investors found that the Banking (BANK) was the most attractive sector followed by Petrochemicals & Chemicals (PETRO) and Information & Communication Technology (ICT)  sectors while Tourism & Leisure (TOURISM) is the least attractive sector, followed by Fashion (FASHION) and  Media & Publication (MEDIA) sectors.

Looking forward, U.S. senate election is tipped to be one of the catalysts as the result could imply how efficient the U.S.’ economic stimulus package can be considered in the upper-house. Lockdown measures in European and Asian countries, which have raised concerns over the possible re-emerge of economic regression, will be closely monitored. Locally, eyes are on how the new wave of COVID-19 infection would impact Thailand’s economic recovery, particularly in tourism sector.”