Investor confidence bullish for second straight month

The Federation of Thai Capital Market Organizations’ (Fetco) Investor Confidence Index (ICI) remained in a very bullish zone last month, supported by optimism towards government economic stimulus, the Bank of Thailand’s interest rate cut, and the tourism recovery.
Fetco chairman Kobsak Pootrakool said the ICI, which anticipates market conditions over the next three months, stood at 160.66 in October, remaining in the very bullish zone for a second consecutive month.
“The government’s economic stimulus package is the most supportive factor, followed by the policy rate cut by the Bank of Thailand’s Monetary Policy Committee [MPC], and the tourism recovery,” he said, adding that the confidence, however, had been undermined by inflation, international conflicts, and local political uncertainties.
The bullish overall sentiment came despite the confidence of retail investors declining 6% to 138.71, while that of proprietary and foreign investors also fell 14.3% and 10%, respectively, to 150 and 180. The ICI in the category of institutional investors was steady at 140, he noted.
Findings from the ICI survey, which was conducted between Oct 20-31, showed that the most attractive sector for investment on the Stock Exchange of Thailand (SET) is tourism and leisure, while automotive is the least attractive business.
In the first half of October, the SET index moved in a tight range before the benchmark responded positively to the MPC’s 25-basis-point rate cut, bringing the policy rate down to 2.25%.
However, profit-taking by foreign investors emerged as the market anticipated a slower pace of interest rate reductions by the Federal Reserve, while uncertainty over the US presidential election remains. At month-end, the Thai index finished at 1,466.04 points, up 1.2% from the previous month with an average daily trading volume of 54.8 billion baht. Foreign investors were net sellers of 28 billion baht last month, with 122.8 billion baht net sales between January and October.
External factors to monitor include escalating conflicts in the Middle East, US election results, and the post-election trade policy direction, which may cause fluctuations in global stock markets. In addition, all eyes are on China’s economic recovery direction following the launch of its bold stimulus packages.
Domestic factors include support for tourism and the export recovery, which is expected to boost the Thai economy, the trend of inflation, economic growth, and financial stability, which will impact the MPC’s rate decision in upcoming meetings.
In addition, investors are monitoring year-end buying sprees of units of the ThaiESG and Vayupak funds as well as the third-quarter financial results of listed companies, which are tipped to be positive in line with local economic growth, added Mr Kobsak.