“ICI retreats to ‘bearish’ zone

Economic stimulus measures and economic recovery to boost sentiment

International conflicts and Fed’s policy hold back confidence”

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                                                                      FETCO Press Release: 6 August 2024

 

Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed that the FETCO Investor Confidence Index (FETCO ICI) in August 2024 (conducted during 20-31 July 2024), which anticipated the market condition over the next three months, is at 60.40, entering “bearish” zone. Investors view that the government’s economic stimulus measures to help boost confidence the most, followed by local economic recovery and tourism recovery. However, international conflicts, the Fed’s policy and economic slowdown are the top three most concerning factors.

 

Highlights of FETCO Investor Confidence Index surveyed in July 2024 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (October 2024) is in “bearish” zone (40-79 of FETCO ICI Criterion) at 60.40.
  • Confidence of retail, proprietary and institutional investors is in “neutral” zone while that of foreign investors is in “very bearish” zone.
  • Most attractive sector is Tourism & Leisure (TOURISM).
  • Least attractive sector to investors is Automotive (AUTO).
  • Most influential factor driving the Thai stock market is the government’s stimulus measures.
  • Most important factor impeding the Thai stock market is international conflicts.

 

“The survey results in July 2024 show that retail investors’ confidence declines 11.3 percent to 83.10, proprietary investors up 96.9 percent to 112.50, institutional investors down 17.4 percent to 90.91 and foreign investors down 55.6 percent to 33.33.

 

SET Index in July was supported by positive cues such as the U.S.’ slowing inflation, which led market to anticipate the rate cut by Fed; SET’s implementation of Uptick Rules for short selling transactions; and progress on Thailand’s digital wallet scheme. Amid the World Bank’s revising down Thailand’s economic growth forecast in 2024 to 2.4 percent vs 2.8 percent previously expected and shaking confidence towards Thai listed companies following recent governance related breach, SET Index managed to close at 1,320.86, up 1.5 percent from the previous month with an average daily trading volume of THB 44,162 million. Foreign investors were net sellers of THB 1,576 million and they have cashed out THB 117,559 million from Jan-July 2024.

 

External factors to monitor include Fed’s monetary policy on easing its rate; the U.S.’ elections following Donald Trump’s assassination attempt and Joe Biden’s withdrawal from presidential race; China’s stimulus for capital market to revive confidence, which includes short selling control; and conflicts in the Middle East. Domestically, eyes are on listed companies’ earnings, the government’s digital wallet scheme and political situation, which is pending for the Constitutional Court’s decision.”