“ICI rebounds to bullish zone

 Investors anticipate tourism recovery and domestic economy to boost sentiment

Uncertainty over Fed’s policy and COVID-19 situation still undermine confidence”


FETCO Press Release:  December 8, 2022

Kobsak Pootrakool, 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 124.42, up 14.3 percent from the previous month, returning to “bullish” zone. Investors expect tourism recovery to be the most supportive factor, followed by domestic economic recovery and trend of FED’s slower pace of interest rate hike. However, FED’s uncertainty over its policy rate moves clouds sentiment the most, followed by COVID-19 situation and the announcement on the financial transaction tax on securities trades on The Stock Exchange of Thailand (SET).

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

  • Overall FETCO Investor Confidence index for the next three months (February 2023) is in “bullish” zone (120-159 of FETCO ICI Criterion), up 14.3 percent from the previous month to 124.42.
  • Confidence of retail investors is in “neutral” zone while that of proprietary, institutional, and foreign investors is “bullish zone”
  • Tourism and Leisure (TOURISM) is the most attractive sector
  • 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 uncertainty over Fed’s interest rate hike policy

November 2022 survey results show that ICI of retail investors retreats 3.7 percent to 109.2 while that of proprietary investors rises 28.6 percent to 142.86. Confidence of local institutional investors is down 0.5 percent to 129.41 while that of foreign investors increases 40 percent to 140.00.

In November 2022, SET Index moved in tight range. Fed had slowed down its pace on interest rate hike as inflation showed sign of slowing down. Thailand’s 3Q GDP expanded 4.5 percent, reflecting that growth has been accelerated in the second half of this year. In addition, Thailand’s tourism recovery boosted confidence. However, sentiment was pared back by concerns that the overall economy may be impacted from the COVID-19 infection situation, especially in China, and Thailand’s plan to reactivate financial transaction tax on securities trades in 2023. At month-end, SET Index closed at 1,635.36, up 1.7 percent from the previous month. Foreign investors remained as net buyers of THB 30,129 million in November. Year-to-date, foreign investors have accumulated Thai shares as net buyers of THB 184,060 million.

External factors to monitor include China’s COVID-19 restriction measures after severe protest against the government’s tight Zero COVID policy. Inflation in the US, though the pace has been slowed down, remains above target, which will weigh on FED’s decision to hold its high policy rate longer than market earlier anticipated. European countries are heading to recession following the unresolved Russia-Ukraine conflicts that have triggered energy crisis and inflation. Locally, eyes are on post-APEC political situation as parliament dissolution and general elections may follow in 2023. In addition, the government’s economic stimulus measures are on the watch.