“August ICI remains in neutral zone

Investors optimism on local tourism recovery and fund inflow

COVID-19 resurgence and Fed’s hawkish stance cloud confidence”

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  FETCO Press Release: Wednesday, 7 September 2022

 

Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in August, which anticipated the market condition over the next three months, is at 116.59, up 12.2 percent from the previous month, maintaining in “neutral” zone. Tourism recovery is expected to be the most influential driver boosting the confidence, followed by fund inflow and Fed’s monetary policy. Investors are concerned about COVID-19 infection situation, Fed’s interest rate hike policy and fund outflow, respectively.

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

  • Overall FETCO Investor Confidence index for the next three months (November 2022) remains in “neutral” zone (80-119 of FETCO ICI Criterion), up 12.2 percent from the previous month to 116.59.
  • Confidence of retail and proprietary investors is in “bullish zone” while that of institutional and foreign investors is in “neutral” 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 COVID-19 infection situation

“The survey result in August 2022 shows that confidence all types of investors except foreign investors heads upward. Retail investor’s confidence rises 18.3 percent to 127.42. Proprietary trader jumps 12.0 percent to 140.00. Local institutional investor is up 39.5 percent to 106.67 while foreign investor remains unchanged at 100.00.

In August 2022, the SET Index tracked global market revival on the back of expectation that Fed would slow down its pace on monetary policy move and resumption of local economic activities, especially on tourism front. However, the SET Index mildly retreated in the last week of the month following Fed’s signal to continue its hawkish approach to tame inflation and Thailand’s Constitutional Court’s decision to suspend Prime Minister Prayuth Chan-ocha from official duties. As a result, the SET Index moved in tight 1,589.16—1,644.78 range and closed at 1,638.93 at the end of the month, which was 4 percent higher than a month earlier. Foreign investors remained as net buyers of THB 57.01 billion for the month, accumulating THB 170.74 billion year to date.

External factors to monitor include COVID-19 infection situation following rising positive cases reported in several countries including Japan, South Korea, and Taiwan. In addition, China’s zero-COVID policy remains in place with lockdown implemented periodically, which has affected China’s economic recovery. Other factors include soaring inflation, which puts several central banks, especially Fed, on a difficult journey towards monetary policy easing, and currency depreciation in emerging markets. For local cues, eyes are on COVID-19 situation development as the country is returning to normalcy; the Constitutional Court’s decision on the Prime Minister’s term, which will affect local political situation; pace of economic and tourism recovery; and the Bank of Thailand’s interest rate hike approach to curb inflation surge on the back of continuously rising food and energy prices.”