“Investor Confidence remains in bullish zone

Investors optimistic on economic recovery and fund inflow 

Concerns over spread of Omicron variant and international conflicts still cloud sentiment”

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                                                                       FETCO Press Release: Thursday, 6 January 2022

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in December, which anticipated the market condition over the next three months, is at 129.53, down 4.2 percent from the previous month but remains in “bullish” zone. Local economic recovery is the most supportive factor anticipated, followed by fund inflow, and listed companies’ earnings report. However, the spread of Omicron variant, international conflicts and upcoming meeting of the Bank of Thailand’s Monetary Policy Committee clouded sentiment.

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

  • Overall FETCO Investor Confidence index for the next three months (March 2022) is in “bullish” zone (120-159 of FETCO ICI Criterion), falling 4.2 percent to 129.53 from the previous month.
  • Confidence of retail, institutional and foreign investors is in “bullish” zone while that of proprietary investors is in “neutral” zone.
  • Most attractive sector to investors is Banking (BANK).
  • Least attractive sector to investors is Tourism and Leisure (TOURISM)
  • Most influential factor driving the Thai stock market is local economic recovery.
  • Most important factor impeding the Thai stock market is worries over the spread of Omicron variant of COVID-19.

 

“The survey result in December 2021 shows that confidence of retail investors falls 5.8 percent to 127.63 while confidence of local institutional investors dropped 19 percent to 121.43. Confidence of proprietary investors and foreign investors remains at 100.00 and 140.00 respectively.

In December, SET Index moved in 1,588.19 – 1,657.62 range. Local factors impacting the index included the surge of Omicron infection cases and the Finance Ministry’s plan to impose a 0.1% financial transaction tax on securities trades. At the end of December, SET Index closed at 1,657.62 or a 5.7 percent increase from the previous month and rose 14.4 percent from the end of 2020.

External factors to be monitored include the impact from Omicron variant spread, of which the number of positive cases spiked quickly in several countries; US-China trade war sparked after US Congress approved a bill that requires companies to prove that goods imported from China were not produced with forced labor, especially products in technology sector; U.S. Securities and Exchange Commission’ rules that allows it to delist foreign companies if they don’t comply with U.S. auditing requirements; result of several Central Banks moves to curb inflation. For example, the Bank of English increased its policy rate from 0.1 percent to 0.25 percent; the US Federal Reserve plans to double taper of bond-buying to USD 30 billion while signaling to raise its policy rate three times in 2022. European Central Bank announced to cut bond buying and kept its policy rate unchanged. For internal factors, investors monitor the government’s plan to handle Omicron spread in Thailand, stimulus package that will replace the ones that expired and listed companies’ earnings report.