Investor Confidence remains in bullish zone Investors buoyed by improving COVID-19 situation on vaccine rollout and local economic recovery Ongoing COVID-19 spread

Thursday 07 October 2021 09:45
Paiboon Nalinthrangkurn, Chairman of the Federation of Thai Capital Market Organizations (FETCO), said "the FETCO Investor Confidence Index (FETCO ICI) in September, which anticipated the market condition over the next three months, is at 142.71, down 1.1 percent from the previous month, but remaining in "bullish" zone. Continued vaccine rollout to ease COVID-19 situation is viewed as the most supportive factor, followed by pace of local economic recovery and fund inflow. However, the current wave of COVID-19 spread in Thailand, the upcoming policy rate call of Bank of Thailand's Monetary Policy Committee and direction from FED's meeting top the most concerning factors.
Investor Confidence remains in bullish zone Investors buoyed by improving COVID-19 situation on vaccine rollout and local economic recovery Ongoing COVID-19 spread

Highlights of FETCO Investor Confidence Index surveyed in September 2021 are as follows.

  • Overall FETCO Investor Confidence index for the next three months (December 2021) across investor types is in "bullish" zone (120-159 of FETCO ICI Criterion), falling 1.1 percent to 142.71 from the previous month.
  • Confidence of proprietary investors remains in "very bullish" zone. That of retail and institutional investors continues to stay in "bullish" zone while that of foreign investors steps back to "bullish" zone.
  • Most attractive sector to investors is Commerce (COMM).
  • Least attractive sector to investors is Fashion (FASHION).
  • Most influential factor driving the Thai stock market is vaccine distribution to improve COVID-19 situation.
  • Most important factor impeding the Thai stock market is the current wave of COVID-19 spread.

"The survey result in September 2021 shows that retail investors' confidence increases 7 percent to 136.31. That of proprietary traders increases 3 percent to 171.43. Confidence of local institutional investors is steady at 133.33 while that of foreign investors drops 11 percent to 142.86."

In September, the SET Index moved in tight 1,603-1,650 range although the number of COVID-19 positive case tended to decline while the government started to allow certain economic activities to resume. Even so, the number of infected cases with the transmissible Delta variant was still higher than 10,000 cases/ day while death cases continued to climb. The vaccination rate was still limited although the number fully vaccinated rose. Floods in several areas in the North, Central and Northeast of Thailand are expected to hurt local economy. Debt default of China's property giant Evergrande was one of the factors dragging confidence in global market. However, September welcomed a few positive cues. The first one, Thailand's State Monetary and Fiscal Policy Committee raised the ceiling of the public debt-to-GDP ratio to 70 percent, allowing further borrowing to rehabilitate the economy battered by Covid-19. The second one, the government has eased lockdown measures, allowing several businesses to resume since 1 October 2021. At the end of September, SET Index closed at 1,605.68, down 2 percent from the previous month.

External factors to monitor include expectation on FED 's QE tapering move in its FOMC meeting in November, which triggered falls emerging market shares. Worries over China's economy that may be impacted by power shortage in the country weigh. Eyes also on the economic uptick in Euro zone and Japan as the pandemic seems to be contained. However, lingering lockdown measures put in place in several ASEAN countries, such as Vietnam and Malaysia, is needed to be watched as it will impact the production industry in the region. Internal factors include the capability of the government to reopen the country and the acceleration of vaccination distribution, which is the key catalyst to drive the economy and revive tourism industry.

Source: Federation of Thai Capital Market Organizations