“Investor Confidence Index bearish as investors show concern over economic slowdown and domestic politics while at the same time are hopeful about domestic economic growth and government policy.”

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FETCO Press Release: October 9, 2020

 

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), commented on the FETCO Investor Confidence Index (ICI) survey for September 2020:  “The Investor Confidence Index for the next three months is at 67.44, remaining in the bearish zone for the second consecutive month.  Investors are most hopeful about the domestic economy, followed by government policies, a recovery of the tourism sector, and the production of a COVID-19 vaccine.  The biggest negative factor dragging down investor confidence is fear of a domestic economic slowdown, followed by concerns about domestic politics, international conflicts, and the second wave of COVID-19 occurring in a number of countries.”

 

Results of the FETCO Investor Confidence Index for September 2020 are summarized below:

  • FETCO Investor Confidence Index (ICI) for the next three months (through December 2020) for all groups of investors was at 67.44, staying in the bearish zone (index range 40–79) for the second consecutive month.

 

  • Retail investor and proprietary trader ICI’s were neutral, while local institutional investors and foreign investors were bearish.

 

  • The Food & Beverage (FOOD) sector continued to draw the most investor interest.

 

  • The Banking (BANK) sector remained least attractive for investors.

 

  • Domestic economic growth was the most important factor buoying the Thai stock market.

 

  • The domestic economic downturn was the biggest drag on the Thai stock market.

 

“The September 2020 Investor Confidence Index survey results saw retail investor ICI drop slightly to 80.30 within the neutral criterion; proprietary traders remained neutral at 100.00; local institutional investors fell into the bearish zone at 68.42; while foreign investors rose to 42.86 but remained bearish.

 

“For September 2020, the Stock Exchange of Thailand (SET) Index closed at 1237.04, a 5.62% decrease from the previous month.  A number of negative factors are affecting investor confidence including: the news of the suspension of the COVID-19 vaccine development program; the plummeting share prices of technology companies in many countries; news of Thai financial institutions involved in suspicious money transfers; the continuing domestic political unrest; and the U.S. Federal Reserve Bank signaling it will maintain the policy interest rate at 0–0.25% until 2023.  However, investor hopes are buoyed by the economic support provided by government spending as well as continuing government measures to stimulate the domestic economy and boost tourism.

 

Investors see domestic economic growth as the major contributor to boosting confidence followed by government policy, the recovery of the tourism sector, and expectations for the production of a COVID-19 vaccine.  The biggest drag on investor confidence is the fear of a domestic economic slowdown followed by concerns about the domestic political situation, international conflicts, and the second wave of COVID-19 outbreaks in many countries.

 

Global issues that warrant monitoring include the recurrence of a severe COVID-19 outbreak resulting in lockdown measures in many countries; growing US–China tensions; Brexit negotiations between the UK and the EU; and the approaching US presidential election.  Domestic factors that should be watched include:  the consequences of approving travelers to enter the kingdom including provisions for a Special Tourist Visa (STV); the likelihood of increasing unemployment; the domestic political situation which is heating up; and the SET and Thailand Futures Exchanges (TFEX) resuming the normal rules on short selling and ceiling & floor”.

 

For more information, please contact:

 

Federation of Thai Capital Market Organizations (FETCO)

Telephone: 02 009 9520 / 02 009 9506 / 02 009 9484

or email: fetco@set.or.th