“ICI retreats to “bearish” zone

Investors expect tourism recovery and economic stimulus to boost sentiment

Fed keeping interest rate steady and inflation undermine”

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                                                                      FETCO Press Release: 6 February 2024

 

Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed that the FETCO Investor Confidence Index (FETCO ICI) in January 2024 (conducted during 20-31 January 2024), which anticipated the market condition over the next three months, is at 77.55, down 43.4 percent from the previous month, falling to “bearish” zone. Tourism recovery is tipped to be the most positive cue, followed by the government’s stimulus package and listed companies’ earnings. Fed keeping its policy rate steady, inflation situation and economic slowdown shatter confidence.

 

Highlights of FETCO Investor Confidence Index surveyed in January 2024 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (April 2024) is in “bearish” zone (40-79 of FETCO ICI Criterion), down 43.4 percent from the previous month to 77.55.
  • Confidence of retail and proprietary is in “neutral” zone. Foreign investors are “bearish” while institutional investors are “bullish”.
  • Most attractive sector is Tourism and Leisure (TOURISM).
  • Least attractive sector to investors is Property Development (PROP).
  • Most influential factor driving the Thai stock market is tourism recovery.
  • Most important factor impeding the Thai stock market is Fed keeping its policy rate steady.

 

“The survey results in January 2024 show that investor’s confidence across categories fell from a month earlier, with retail investors down 26.9 percent to 87.50, proprietary investors down 12.5 percent to 87.50, institutional investors down 13.5 percent to 138.46 and foreign investors down 60.0 percent to 60.00.

 

SET Index in January headed south throughout the month, clouded by Thailand’s lower-than-expected economic growth in 2023, which expanded only 1.8 percent on year comparison; counter partners’ economic slowdown hurt Thai exports, which contracted 1 percent. In addition, sentiment was dampened further by external factors, including mounting concerns that Fed may begin its dovish move slower than earlier anticipated, Chinese sluggish economy and its weakened property sector as well as lingering conflicts in the Middle East. At month-end, the SET Index closed at 1,364.52, down 3.6 percent from a month earlier. Average daily trading volume was THB 47,111 million with foreign investors cashing out THB 30,870 million.

 

External factors to monitor include easing policy rate policy in key economies such as the United States and Europe and China’s economic stimulus with eyes on the government’s plan to mobilize two trillion yuan to prop up capital market. Local cues include 2023 earnings of listed companies, tourism recovery as visa-free entry policy between Thailand and China will take place from 1 March. In addition, investors await to see the implementation of the government’s stimulus package, which has been delayed. The first meeting of the year of the Bank of Thailand’s Monetary Policy Committee is also mentioned with policy rate decision and economic growth projection in focus.