Investor Confidence continues to ride in bullish zone

Investors buoyed by expected fund inflow and improving COVID-19 situation 

Resurgence of COVID-19 infection and Euro zone economy weigh on sentiment

—————————————————————————————————————————-

                                                                       FETCO Press Release: Tuesday, 2 February 2021

 

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed investor confidence in January 2021 showed that “the FETCO Investor Confidence Index (FETCO ICI) for the next three months rose to 132.55, or a 1.5 percent increase from the previous month, maintaining in “bullish” zone for the second consecutive month. Investors anticipated fund inflow to be the most supportive factor, followed by improving COVID-19 situation by more positive vaccine news and listed companies’ earnings. However, the resurgence of Covid-19 infection, Euro zone economy and local economic retreat undermine investors the most.

 

Highlights of FETCO Investor Confidence Index surveyed in January 2021 are as follows;

  • FETCO Investor Confidence indices across investor types for the next three months (April 2021) continues in “bullish” zone (120-159 of FETCO ICI Criterion), expanding 1.5 percent to 132.55 from the previous month.
  • Investor confidence of retail investors, proprietary traders and foreign investors stayed in “bullish” zone while institutional investors were more cautious on “neutral” territory.
  • Most attractive sector to investors was Energy and Utilities (Energy).
  • Least attractive sector to investors was steel (STEEL).
  • Most influential factor driving the Thai stock market was fund inflow.
  • Most important factor impeding the Thai stock market was the resurgence of COVID-19 spread.

 

“The results of January 2021 survey showed that investor confidence of retail investors rose 22 percent to

144.07. Proprietary traders declined 3 percent to 125.00. Institutional Investors decreased 1 percent to 117.65 while foreign investors retreated 17 percent to 125.00.

 

The first half of January saw the SET index fluctuated in 1,468.24-1,547.31 range, mostly driven by investors offloading low-free float securities. Stocks in electronics sector were impacted the most. The index moved in tight range in the latter half of the month. Although the government’s financial aid program called “We Win” and easing COVID-control restrictions added up positive catalysts to the market, it was offset by foreign investor’s selloff, which could be driven by stock market correction that is in line with other global markets. At the end of January, SET Index closed at 1,466.98, up 1.22 percent from the preceding month.

 

Investors viewed that fund inflow would be the most supportive factor, followed by improving COVID-19 situation by more positive vaccine news and listed-companies’ earnings. However, the resurgence of COVID-19 spread, the Euro zone economy and local economic retreat held back their confidence.

 

Energy and Utilities sector captured investors’ attention the most, followed by Petrochemical & Chemical and Commerce sectors. Investors shunned away from investment in Steel, Tourism and Property Fund & REIT sectors.

 

External factors on the watch include global economic recovery after vaccine inoculation has come into play, U.S.-China trade agreement review and U.S. President Joe Biden’s economic stimulus measures. For local front, key movements to monitor include listed companies’ earnings, the government facing no-confidence motion and the parliamentary scrutiny of constitutional amendments. Investors also have their eyes on the development of the number of COVID-19 infection, the government’s vaccine rollout plan to public and possibility that the government may extend its economic relief measures.