“Investor confident in neutral zone

Investors expect local tourism recovery and Fed’s policy to boost sentiment

Geopolitical tensions and Fed’s hawkish approach undermine confidence”


                                                                       FETCO Press Release: Friday, 5 August 2022


Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in July, which anticipated the market condition over the next three months, is at 103.92, up 60.9 percent from the previous month, hovering back to “neutral” zone. Tourism recovery is the key driver boosting the confidence, followed by Fed’s monetary policy and local economic recovery. Investors are respectively concerned about geopolitical tensions, Fed’s interest rate hike policy to tame inflation and rising inflation triggered by rising commodities prices in global market.

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

  • Overall FETCO Investor Confidence index for the next three months (October 2022) is in “neutral” zone (80-119 of FETCO ICI Criterion), up 60.9 percent from the previous month to 103.92.
  • Confidence of proprietary investors is in “bullish zone” while that of retail and foreign investors is in “neutral” zone. Confidence of local institutional investors is in “bearish” zone.
  • Most attractive sector to investors is Banking (BANK).
  • Least attractive sector to investors is Fashion (FASHION).
  • Most influential factor driving the Thai stock market is tourism recovery.
  • Most important factor impeding the Thai stock market is geopolitical concerns

            The survey result in July 2022 shows that retail investor’s confidence rises 54.8 percent to 107.69. Proprietary trader jumps 125.0 percent to 125.00. Local institutional investor is down 12.6 percent to 76.47 while foreign investor increases 75 percent to 100.00.

In July 2022, the SET Index moved in tight 1,533.37—1,576.41 range on the back of worries over global recession, especially in the United States where inflation rate spiked to 40-year-high. Energy crisis in Europe triggered by supply cut by energy companies in Russia and rising number of COVID-19 positive cases in the country dampened the sentiment. However, Fed raising its policy rate of 75 bps as market earlier anticipated, helped ease some worries. The SET Index at end-July closed at 1,576.41, up 0.5 percent from the previous month. Foreign investors returned from last month’s net sellers to become net buyers of THB 4,662.35 million.

External factors to monitor include geopolitical tensions from both lingering Russia-Ukraine conflict and America–China–Taiwan situation, efficiency of Fed’s taming inflation approach and how ECB would solve energy crisis in Europe. Thai listed companies’ earnings may be impacted by trend of economic slowdown and currency issues in neighboring countries such as Myanmar and Laos. In the meantime, local factors to keep an eye on includes clearer sign of tourism recovery as the government eased travel restrictions, which will have an impact on the country’s economic recovery. Also, COVID-19 infection situation will continue to be factored in.”