“ICI moves to neutral zone

Investors expect local general elections & Fed’s slowing rate hike to boost sentiment

 Fund outflow and Fed’s policy to tame inflation undermine confidence”

                                                                      FETCO Press Release:  April 10, 2023

Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in March 2023, which anticipated the market condition over the next three months, is at 95.65, down 21.0 percent from the previous month, moving to “neutral” zone, as the SET index fluctuated on March amid worries over U.S., European bank turmoil. Local general elections are the most supportive factor, followed by Fed’s easing pace of interest rate and local tourism recovery. However, investors are most concerned about the fund outflow, followed by Fed’s monetary policy direction to curb inflation and slowing exports.

Highlights of FETCO Investor Confidence Index surveyed in March 2023 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (June 2023) is in “neutral” zone (80-119 of FETCO ICI Criterion), down 21 percent from the previous month to 95.65.
  • Confidence of retail and proprietary investors is in “neutral” zone. Institutional investors’ confidence is in “bullish” zone while that of foreign investors is in “bearish” zone.
  • Most attractive sector is Tourism and Leisure (TOURISM).
  • Least attractive sector to investors is Banking (BANK)
  • Most influential factor driving the Thai stock market is local general elections.
  • Most important factor impeding the Thai stock market is worries over the fund outflow.

              “The survey results in March 2023 show that only institutional investors’ confidence is positive, rising 21.9 percent to 131.25 while that of other types of investors are down, retail investors down 7.9 percent to 112.07, proprietary investors down 20.0 percent to 100.00 and foreign investors down 38.6 percent to 75.00.

During the first half of March 2023, SET Index was fluctuated. Later, it was weakened in a wake of banking crisis, triggered by the abrupt collapse of the U.S.’ Silicon Valley Bank, which played an important role in offering financing solutions for startups, followed the fallout of Credit Suisse, which saw UBS come to rescue. The matter rattled global banking sectors. In addition, worries over Fed’s hiking its policy rate to curb inflation still undermined confidence. However, in the latter half of March, SET Index parred some loss on easing banking crisis and Fed slowing down the pace of its hike with 25 bps. The Bank of Thailand’s Monetary Policy Committee also raised its policy rate by 25 bps. Local political situation is getting more of the focus as the election day has been set by the Election Commission. At month-end, SET Index closed at 1,609.17, down 0.8 percent from the prior month. Foreign investors were net sellers of THB 31,494 million for the month with total net selling of THB 56,059 million for the quarter.

For external factors, investors are cautious if the ease of banking crisis in the U.S. and Europe is short-lived. Movements of key global central banks, including the U.S., Europe and England, on using their policy rate to tame inflation, remain on the radar. Prolonging Russia-Ukraine conflicts are also on the watch. Locally, eyes are on the pre-election political situation and export contraction as a result of slowing economy of trading partners.”