“Investor Confidence continues in bullish zone

Investors anticipates vaccination plan to ease COVID-19 situation and trigger economic recovery

Worries over new wave of COVID-19 spread and international conflicts weigh on sentiment”

 

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                                                                       FETCO Press Release: Monday, 7 June 2021

 

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said investor confidence conducted in May 2021 showed that “the FETCO Investor Confidence Index (FETCO ICI) for the next three months is at 126.40 or 1.6 percent rise from the previous month, still hovering in “bullish” zone. COVID-19 vaccination program expected to help ease COVID-19 situation, is the most supportive factor, followed by anticipation on local economic recovery and fund inflow. However, the third wave of COVID-19 spread in Thailand taints momentum the most. International conflicts and the result of Thailand’s Monetary Policy Committee meeting also undermine sentiment.

 

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

  • FETCO Investor Confidence indices across investor types for the next three months (August 2021) is in “bullish” zone (120-159 of FETCO ICI Criterion), climbing 1.6 percent to 126.40 from the previous month.
  • Apart from institutional investors, whose confidence sits in ‘neutral’ stance, confidence of other types of investors is in “bullish” zone.
  • Most attractive sector to investors is Electronics (ETRON).
  • Least attractive sector to investors is Fashion (FASHION).
  • Most influential factor driving the Thai stock market is vaccine plan to ease COVID-19 situation.
  • Most important factor impeding the Thai stock market is the third wave of COVID-19 spread.

 

“The findings in May 2021 shows that the confidence of retail investors retreats 3 percent to 125.37. That of proprietary traders increases 9 percent to 150.00. Investor confidence of institutional investors jumped 26 percent to 118.75 while that of foreign investors remains unchanged at 120.00.”

In May, SET Index was fluctuate in 1,548.13 —1,593.59 range. The first week saw the index rise in line with the U.S. and European stock markets. The sentiment was also boosted by Thailand’s private sector joining force to accelerate the vaccine procurement. However, the Thai stock market drastically slid during the middle of the month following worries over the U.S.’ higher-than-expected inflation, which might trigger the U.S. Federal Reserve to signal its policy rate increase while its quantitative easing measure was downsized sooner than market anticipation and U.S. Treasury yields rose. New COVID-19 clusters emerged in several areas in Bangkok plus over 2,000 new cases confirmed daily mounted concerns. The market suffered a double whammy blow as the Indian variant of COVID-19 was found in Thailand and the vaccine distribution had been delayed. Nevertheless, the government’s latest THB250 billion stimulus package helped curb the downfall and shored the index up to close at 1,593.59 at the end of May.

External factors to monitor include the gradual economic recovery in the U.S., China and Europe as more businesses resume while vaccine rollout continues, which will consequently revive Thailand’s exports. Meetings of major Central Banks, including Europe, U.S., Japan and British will be on the watch. International conflicts will also be on the radar. In addition, the new wave of COVID-19 spread in neighboring countries such as Malaysia and Vietnam is still a factor to keep an eye on. For domestic factors, Thailand’s plan to procure 100 million COVID-19 vaccine doses and the successful rollout by this year will be a crucial catalyst to regain consumer confidence and make a positive impact to the country’s economic recovery. Finance Ministry’s proposed THB500 billion additional borrowing and the result of the Bank of Thailand’s Monetary Policy Committee meeting scheduled on 23 June 2021 will also be in the center of focus.”