“FETCO ICI remains in bullish zone
Investors expect tourism recovery and listed companies’ earnings to boost sentiment
International conflicts and tax on securities trades undermine confidence”
FETCO Press Release: January 10, 2023
Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in December 2022, which anticipated the market condition over the next three months, is at 121.75, down 2.1 percent from the previous month, remaining in “bullish” zone. Investors expect tourism recovery to be the most supportive factor, followed by listed companies’ earnings and domestic economic recovery. However, international conflicts, the announcement on the financial transaction tax on securities trades on the Stock Exchange of Thailand (SET) and inflation situation undermine confidence.
Highlights of FETCO Investor Confidence Index surveyed in December 2022 are as follows.
- Overall FETCO Investor Confidence index for the next three months (March 2023) remains in “bullish” zone (120-159 of FETCO ICI Criterion), down 2.1 percent from the previous month to 121.75.
- Confidence of retail and foreign investors is in “bullish” zone while that of proprietary and institutional investors is “neutral” zone.
- Most attractive sector is Commerce (COMM).
- Least attractive sector to investors is Steel and Metal Products (STEEL)
- Most influential factor driving the Thai stock market is tourism recovery.
- Most important factor impeding the Thai stock market is international conflicts.
“December 2022 survey results show that ICI of retail investors rises 17.6 percent to 128.38 while that of other investor types declines; proprietary investors down 40 percent to 85.71, institutional investors down 18.4 percent to 105.56 and foreign investors down 10.7 percent to 125.00.
In December 2022, SET Index stayed above 1,600 throughout the month, thanks to supportive factors from local tourism recovery, business returning to normalcy during the last month of the year while China’s reopening plan helped boost tourism sector and exports and FED signaling easing monetary policy. However, confidence was still undermined by lingering Russia-Ukraine conflicts and local government’s taxation plan on securities trades in Thai stock market. At month-end, SET Index closed at 1,668.66, up 2 percent from the previous month. Foreign investors remained as net buyers of THB 12,826 million in December, accumulating THB 196,886 million for 2022.
External factors to monitor include risks of recession in 2023, which will urge global central banks to put tight financial measures in place; China’s reopening, which will boost its economy and tourism in Asia; lingering Russia-Ukraine conflicts; and energy crisis in Europe. Local factors to watch include listed companies’ earnings; Thailand’s exports which is expected to be contracted in line with global economic slowdown especially in the US and Europe; the government’s economic stimulus policy; upcoming general elections that may cause public investment to slow down during the transition; and expected rising number of tourism arrival, which may put COVID-19 infection on alert.”