“ICI returns to ‘neutral’ zone

Government’s economic stimulus and local economic recovery to support sentiment

 Fund outflow and economic retreat undermined”

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                                                                      FETCO Press Release: 6 October 2023

 

Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed that the FETCO Investor Confidence Index (FETCO ICI) in September 2023 (conducted during 20-30 September 2023), which anticipated the market condition over the next three months, is at 112.14, down 20.6 percent from the previous month, hovering back to “neutral” zone. Government’s economic stimulus measures are anticipated as the most supportive factor, followed by local economic recovery and expectation on fund inflow. However, fund outflow weighs on sentiment the most, followed by local economic retreat and local political situation.

 

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

  • Overall FETCO Investor Confidence index for the next three months (December 2023) is in “neutral” zone (80-119 of FETCO ICI Criterion), down 20.6 percent from the previous month to 112.14.
  • Confidence of institutional investors is in “bullish” zone while that of retail, proprietary and foreign investors is in “neutral” zone.
  • Most attractive sector is Tourism and Leisure (TOURISM).
  • Least attractive sector to investors is Petrochemicals and Chemicals (PETRO).
  • Most influential factor driving the Thai stock market is the government’s economic stimulus measures.
  • Most important factor impeding the Thai stock market is fund outflow.

 

“The survey results in September 2023 show that investor’s confidence across categories was weakened, retail investors down 27.3 percent to 120.00, proprietary investors down 1.2 percent to 111.11, institutional investors down 0.6 percent to 146.15 and foreign investors down 20 percent to 100.00.

 

SET Index headed south throughout September 2023, undermined by concerns over inflation. Oil prices shot up after OPEC and Russia announced oil production cut. Higher than expected inflation triggered the Bank of Thailand’s Monetary Policy Committee to raise its policy rate by 25 basis points to 2.50 percent. Weakened Baht and the government’s measures on electricity bill and diesel price subsidy caused sell-off of securities in energy and utility sectors. At month-end, the SET Index slipped below the 1,500 mark, closing at 1,471.43, down 6 percent from a month earlier. Average daily trading volume in September was at THB 56,218 million. Foreign investors continued their selling spree, offloading THB 22,436 million for the month and cashing out THB 155,372 million from Jan-Sep.

 

External factors to monitor include monetary measures of major central banks as inflation remains above target. China’s central bank set to boost liquidity and fund outflow from emerging markets to developed markets will be on the radar. Locally, eyes are on the government’s economic stimulus policies and measures as so far, those plans are arguably seen as a short-term push under limited budget. Investors would like to see clearer details of THB 10,000 digital handout scheme, electricity bill and energy price subsidy, as well as debt moratorium for farmers. Impact tourism recovery is to be seen after Chinese and Kazakhstani nationals are granted a temporary visa exemption for tourism purpose. Eyes are also on liquidity increase in the Thai stock market after the Finance Ministry scrapped a plan to collect a financial transaction tax.”