“ICI moves to bullish zone
Tourism and elections to be positive catalysts
Worries over COVID-19 situation following rising of tourist arrivals and household debt weigh”
FETCO Press Release: 8 March 2023
Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in February 2023, which anticipated the market condition over the next three months, is at 121.13, down 24.3 percent from the previous month, moving to “bullish” zone. Tourism recovery tops most supportive factor list, followed by local general elections and fund inflow. However, factors undermined investors’ confidence are worries over the resurgence of COVID-19 infection after Thailand has eased restriction to welcome tourists, domestic household debt and political situation during the pre-election.
Highlights of FETCO Investor Confidence Index surveyed in February 2023 are as follows.
- Overall FETCO Investor Confidence index for the next three months (May 2023) moves to “bullish” zone (160-200 of FETCO ICI Criterion), down 24.3 percent from the previous month to 121.13.
- Confidence of retail, proprietary and foreign investors is in “bullish” zone while that of institutional investors is in “neutral” zone.
- Most attractive sector is Banking (BANK).
- Least attractive sector to investors is Mining (MINE)
- Most influential factor driving the Thai stock market is tourism recovery.
- Most important factor impeding the Thai stock market is worries over the COVID-19 situation following the increase of tourist arrivals.
“The February 2023 survey results show that confidence of investors across investor types retreats with retail investors falling 27.0 percent to 121.62, proprietary investors down 9.1 percent to 125.00, institutional investors declining 28.2 percent to 107.69 and foreign investors dropping 23.6 percent to 122.22.
In February 2023, SET Index tracked global equity market fall. Investors were worried that FED may continue to hike its interest rate following the higher-than-expected US inflation report. Triggered by significant interest rate gap between Thailand’s and overseas’, fund outflow from the Thai stock market continued while Thailand’s slower-than-expected economic growth tarnished sentiment further. According to the the National Economic and Social Development Council’s update, Thailand’s GDP expanded 1.4 percent year on year in the fourth quarter of 2022, easing from a 4.5 percent growth in the previous quarter. The domestic economy expanded 2.6 percent in 2022, missing market expectation of 3.2 percent. At month-end, SET Index closed at 1,622.35, down 2.9 percent from the previous month. Foreign investors were net sellers of THB43,562 million in February 2023. In the first two months of this year, foreign net selling totaled THB 24,565 million.
External factors to monitory include FED’s interest rate trend and its monetary policy direction, trend of job cuts in leading companies in overseas, and geopolitical risk especially Russia – Ukraine conflicts that has lingered for over a year. In addition, triggered by the Chinese balloon flying over the US airspace without permission incident, the U.S. – China tension may dampen the trade war between the two countries. Locally, investors follow the development of tourism recovery following the increasing tourist arrivals and government’s stimulus boost for local travelling called We Travel Together, which will help the country’s economy recover to its pre-COVID level sooner. In addition, the pre-election political situation is also on the watch.”