“ICI hovers back to neutral zone

 Positive cues include tourism recovery and expectation on Fed’s slower pace of interest rate hike

Uncertainty over Fed’s policy and inflation cloud sentiment”

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                                                                          FETCO Press Release: Wednesday, 9 November 2022

Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in October, which anticipated the market condition over the next three months, is at 108.86, up 60.5 percent from the previous month, hovering back to “neutral” zone. Investors expect tourism recovery to be the most supportive factor driving confidence, followed by anticipation that Fed would slow down its pace of interest rate hike and local economic recovery. However, uncertainty over Fed’s interest rate hike policy, inflation development and COVID-19 situation respectively top investors’ concerns.

Highlights of FETCO Investor Confidence Index surveyed in October 2022 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (January 2023) is in “neutral” zone (80-119 of FETCO ICI Criterion), up 60.5 percent from the previous month to 108.86.
  • Confidence of retail, proprietary and foreign investors hovers back to “neutral zone” while that of institutional investors rebounds to “bullish” zone.
  • Most attractive sector to investors is Tourism and Leisure (TOURISM).
  • Least attractive sector to investors is Petrochemicals and Chemicals (PETRO).
  • Most influential factor driving the Thai stock market is tourism recovery.
  • Most important factor impeding the Thai stock market is uncertainty over Fed’s interest rate hike

October 2022 survey results show that ICI across investor types rebounds with retail investors rising 46.7 percent to 113.43, proprietary investors increasing 11.1 percent to 111.11, local institutional investors bouncing 14.7 percent to 130.00 and foreign investors surging 150 percent to 100.00.

In October 2022, SET Index continued to extend gains, boosted by slower pace of inflation, anticipation that Fed would slow down its interest rate hike, continued tourism recovery that saw higher-than-expected number of tourists and stronger-than-expected 3Q earnings of banking sector. At month-end, SET Index closed at 1,608.76, up 1.2 percent from the previous month. Foreign investors returned as net buyers of THB 7,467 million in October. Year-to-date, foreign investors have accumulated Thai shares as net buyers of THB 153,932 million.

External factors to monitor include clarity of Fed’s interest rate hike policy, foreign exchange fluctuation that triggered several central banks, especially the Bank of England and the Bank of Japan, to intervene, and trend of economic recession, especially in emerging market. In addition, China’s economic slowdown as a result of Zero COVID policy and lingering Russia – Ukraine conflicts still capture attention. Local cues include export slowdown, rising imports of goods from China that may impact Thai companies, Thai baht depreciation and sharp decline in foreign reserves as a result of US dollar appreciation. However, the sentiment is supported by tourism recovery, which has boosted job employment and recovery in domestic demand.”