“Investor Confidence persists in bullish zone

Investors are upbeat on improving Covid-19 situation as a result of vaccine rollout and fund inflow  

Worries over lingering Covid-19 spread in several countries and inbound tourism weigh on sentiment”

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                                                                       FETCO Press Release: Friday, 2 April 2021

Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed investor confidence in March 2021 showed that “the FETCO Investor Confidence Index (FETCO ICI) for the next three months is at 145.55 or 4.4 percent decline from the previous month, still riding in “bullish” zone for four straight months. Covid-19 threat eased on increase of vaccine distribution contributes as the most supportive factor, followed by anticipation on fund inflow and listed companies’ earnings. However, lingering Covid-19 spread in several countries, tourism situation in domestic market and local political movement hold back confidence.

Highlights of FETCO Investor Confidence Index surveyed in March 2021 are as follows;

  • FETCO Investor Confidence indices across investor types for the next three months (June 2021) is in “bullish” zone (120-159 of FETCO ICI Criterion), dropping 4.4 percent to 145.55 from the previous month.
  • Investor confidence of investors across all types is in “bullish” zone.
  • Most attractive sector to investors is Food and Beverage (FOOD).
  • Least attractive sector to investors is Information and Communication Technology (ICT).
  • Most influential factor driving the Thai stock market is improving Covid-19 situation following the widespread of vaccine distribution.
  • Most important factor impeding the Thai stock market is the prolonging COVID-19 infection in several countries.

“Findings of March 2021 survey shows that investor confidence of retail investors is down 1 percent to 139.47. That of proprietary traders soars 35 percent to 154.55. Investor confidence of institutional investors increases 16 percent to 150.00 while that of foreign investors declines 18 percent to 150.00.”

The most attractive sector to investors is Food & Beverage (FOOD), followed by Tourism & Leisure (TOURISM) and Petrochemicals & Chemicals (PETRO). However, the least attractive ones include Information & Communication Technology (ICT), Fashion (FASHION) and Tourism & Leisure (TOURISM).

In the early of March 2021, SET index continued to rise on the back of vaccine rollout progress in the country. However, the benchmark index dipped during the middle of the month following the global oil price retreat. The index rebounded later in the month, thanks to the positive catalysts, including the Bank of Thailand’s and Finance Ministry’s additional relief measures totaling THB350 billion to aid businesses affected by Covid-19. In addition, the government’s easing restrictions to revive tourism also supported the sentiment. At the end of March, SET Index closed at 1,587.21, up 6.04 percent from a month earlier.

External factors to monitor include the U.S. unveiling a $1.9 trillion infrastructure and economic recovery package, which is expected to support the economic growth of the U.S. and become a driver of global economic recovery. However, such move may impact investors’ anticipation on inflation, which has been reflected in higher bond yields in the U.S. and several countries around the world. Besides, the trade and technology conflicts between the U.S. and China are on the radar as well as the development of political unrest in Myanmar. Domestically, eyes are on the acceleration of vaccine distribution, especially to at-risk groups as any delay may be costly to the recovery of the Thai economy. Investors keep their eyes on how the government can control the Covid-19 infection area as a result of active case finding. The opening of vaccinated foreign tourists to pilot tourism destinations and the local political situation will also be on the watch.