“Investor Confidence remains in “neutral zone” for four straight months

Investors expect tourism recovery, fund inflow to boost confidence

But undermined by worries over Russia-Ukraine situation and Fed’s interest rate policy”

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FETCO Press Release: Thursday, 5 May 2022

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in April, which anticipated the market condition over the next three months, is at 95.42, down 19.1 percent from the previous month, however, it remains in “neutral” zone for four consecutive months. Tourism recovery is anticipated to be the most supportive factor, followed by fund inflow and local economic recovery. Investors are most concerned about the Russia-Ukraine tension, Fed’s hawkish stance and Thailand’s plan to impose financial transaction tax, respectively.

Highlights of FETCO Investor Confidence Index surveyed in April 2022 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (July 2022) is in “neutral” zone (80-119 of FETCO ICI Criterion), down 19.1 percent to 95.42 from the previous month.
  • Confidence of retail, local institutional investors and foreign investors is in “neutral” zone while that of proprietary investors is in “bearish” zone.
  • Most attractive sector to investors is Tourism and Leisure (TOURISM).
  • Least attractive sector to investors is Petrochemicals and Chemicals (PETRO).
  • Most influential factor driving the Thai stock market is tourism recovery.
  • Most important factor impeding the Thai stock market is concerns over Russia-Ukraine conflicts.

“The survey result in April 2022 shows that investor confidence across all types of investors declines. Retail investor falls 13.1 percent to 98.36. Proprietary trader decreases 25.0 percent to 75.00. Local institutional investor is down 15.0 percent to 85.00 while foreign investor retreats 25.0 percent to 100.00.”

In April, the SET Index had negative moves throughout the month, undermined by expected rising rising inflation on the back of by Russia-Ukraine conflicts and a downward revision of Thailand’s 2022 economic growth forecast to 3.5 percent from 4.0 percent. However, the downside of the Thai capital market was offset by the local government’s plan to ease travel restrictions. Continued fund inflow also helped cushion with foreign investors being net buyers of THB 9,779.91 million in April. Foreign investors were net buyers of THB 118,120.26 million year-to-date. The SET Index at end-April closed at 1,667.44, down 1.6 percent from the previous month.

External factors to monitor include impact from lingering Russia-Ukraine tension, which has caused energy and food crisis. The situation has dampened rising inflation pressure and increased the risk of stagflation, which triggered trends of imposing tightening monetary policy by global central banks. For instance, the US Federal Reserve has signaled to speed up its interest rate hike and impose quantitative tightening measure in May, which is sooner than market earlier anticipated. In addition, investors follow the update on lockdown situation in China as COVID-19 infection re-emerged in Shanghai and Beijing. However, positive cues include optimism over reopening in Asian countries, which will help boost tourism recovery. Thailand, in particular, has pinned its hope on the economic recovery and tourism revival after the government has eased travel restrictions.”