“Investor Confidence cooled down to bullish zone

Investors expect domestic economy on path to recovery and continued roll-out of vaccination to ease COVID-19 situation

New COVID-19 variant and international conflicts spark nerves”

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                                                                       FETCO Press Release: Tuesday, 7 December 2021

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in November, which anticipated the market condition over the next three months, is at 135.16, down 19.9 percent from the previous month and retreated to “bullish” zone. Local economic recovery is the most supportive factor anticipated, followed by vaccination distribution to ease COVID-19 situation and revival of tourism industry. However, the emerge of new COVID-19 variant, international conflicts and fund outflow are top three most concerning factors holding back confidence.

Highlights of FETCO Investor Confidence Index surveyed in November 2021 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (February 2022) is in “bullish” zone (120-159 of FETCO ICI Criterion), falling 19.9 percent to 135.16 from the previous month.
  • Confidence of retail, institutional and foreign investors is in “bullish” zone while that of proprietary investors is in “nuetral” zone.
  • Most attractive sector to investors is Information & Communication Technology (ICT).
  • Least attractive sector to investors is Fashion (FASHION).
  • Most influential factor driving the Thai stock market is the pace of local economic recovery.
  • Most important factor impeding the Thai stock market is the emerge of new COVID-19 variant.

“The survey result in November 2021 shows that investors’ confidence across all investor types declines from the previous month 16.2 percent to 135.48. That of proprietary traders decreases 37.5 percent to 100.00. Confidence of local institutional investors is down 5 percent to 150.00 while that of foreign investors drops 22.2 percent to 140.00.”

In November, the SET Index outperformed a month earlier, thanks to the country’s reopening gesture, easing COVID-19 restriction, progress of vaccination roll-out and better-than-expected earnings of listed companies in the third quarter. However, later in the last week of November, the SET Index tracked global market sell-off amid rising concern over COVID cases surge from new variant found in South Africa. As a result, several countries have re-imposed their shut-down measures and travel restriction policies. In addition, the sentiment was dampened further by MSCI weighing down the Thai stock market. In November, foreign investors were net sellers of THB 10.18 billion. The SET Index at end-November closed at 1,568.69, down 3.4 percent from the preceding month.

External factors to monitor include the new wave of COVID-19 spread in Europe and worries over the spread and mutation of recently discovered COVID-19 variant, Omicron, which has raised concerns whether available vaccines are sufficient to curb the outbreak while several countries have re-imposed their travel restriction policies. Other factors include piling pressure on inflation on the back of rising global crude oil price; signal that several Central Banks are turning to hawkish mode; and China’s economic slowdown following electricity control and impact from real estate woes. Internally, eyes are on plans and measures to keep COVID-19 spread under control and new stimulus measures from the government, which will help trigger domestic consumption to boost the country’s economy.