“Investor Confidence remains in “neutral zone” for 5th consecutive month Investors expect economic recovery and tourism revival to boost confidence”

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Kobsak Pootrakool, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said “the FETCO Investor Confidence Index (FETCO ICI) in May, which anticipated the market condition over the next three months, is at 83.91, down 12.1 percent from the previous month, however, it remains in “neutral” zone for five straight months.

Tourism recovery is anticipated to be the most supportive factor, followed by local economic recovery and listed companies’ earnings. Investors are most concerned about Fed’s interest rate hike policy. They are also worried if COVID-19 infection spikes after the reopening while the Russia-Ukraine tension remains a threat.

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

-Overall FETCO Investor Confidence index for the next three months (August 2022) is in “neutral” zone (80-119 of FETCO ICI Criterion), down 12.1 percent to 83.91 from the previous month.

-Confidence of retail and local institutional investors is in “neutral” zone while that of proprietary investors and foreign investors is in “bearish” zone.

-Most attractive sector to investors is Tourism and Leisure (TOURISM).

-Least attractive sector to investors is (FASHION).

-Most influential factor driving the Thai stock market is tourism recovery.

-Most important factor impeding the Thai stock market is Fed’s interest rate hike policy

“The survey result in May 2022 shows that retail investor’s confidence rises 7.1 percent to 105.32. Proprietary trader is unchanged at 75.00. Local institutional investor is down 2.8 percent to 82.61 while foreign investor retreats 40.0 percent to 60.00.”

During the first half of May 2022, SET Index tracked global benchmark indices’ declines as lingering Russia-Ukraine tension triggered rising inflation in the local market and across the globe. The local benchmark was also pressured by worries over slower-than-expected global economic recovery. However, the index rebounded in the latter half of the month, thanks to better-than-expected earnings results of listed companies, expected tourism recovery as the government has eased COVID-19 restriction policy, and continued net buy by foreign investors. Foreign investors were net buy of THB 20,938 million in May and THB 139,058 million for the first five months of this year. SET Index at end-May closed at 1,663.41, down 0.2 percent from the previous month.

External factors to monitor include the development of Geopolitical Crisis, which includes persisting Russia-Ukraine situation; energy crisis, which has triggered rising inflation in several countries; global food crisis; how Fed would deal with inflation; and China’s Zero-COVID policy, which has drastically slowed down the Chinese economy. Locally, eyes are on the Bank of Thailand’s monetary policy as market anticipates sooner-than-expected policy rate hike. Internal factors also include the government’s relief measures to help ease rising cost of living; and tourism recovery as Thailand would fully open for tourism in June.”

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