Investor Confidence Index Drops to 'Stagnant' Level Investors hope that tourism and capital inflows will help boost confidence, while concerns linger over the FED's interest rate policies and inflation from global commodity prices.

 

Mr. Kobsak Puatawong, Chairman of the Thai Capital Market Business Council revealed the Investor Confidence Index (FETCO Investor Confidence Index) survey for June 2022, indicating that "the Investor Confidence Index (ICI) for the next three months stands at 64.57, a decrease of 23.1% from the previous month, marking the first time it has fallen into the 'stagnant' category in 10 months. Investors believe that the recovery of the tourism sector will be the most significant factor supporting confidence, followed by capital inflows and the U.S. Federal Reserve's monetary policy in addressing inflation. The factors that most negatively impact investor confidence include the FED's interest rate hike policy, which may lead to a recession, followed by inflation from global commodity prices and concerns over the COVID-19 Omicron variants BA.4 and BA.5.

The Investor Confidence Index (FETCO Investor Confidence Index) survey for June 2022 summarized the following:

  • The overall investor confidence index for all investor groups in the next three months (September 2022) is in the 'stagnant' category (index range 40-79), down 23.1% from the previous month, at 64.57.
  • Investor confidence among individual investors, brokerage accounts, and foreign investors is at a 'stagnant' level, while domestic institutional investor confidence remains 'stable.'
  • The most interesting business sector is food and beverage (FOOD).
  • The least interesting business sector is fashion (FASHION).
  • The most influential factor supporting the Thai stock market is the recovery of the tourism sector.
  • The most influential factor negatively impacting the Thai stock market is the FED's interest rate hike policy.

 

“The survey as of June 2022 by investor group found that individual investor confidence decreased by 33.9% to 69.57, brokerage account confidence decreased by 25.9% to 55.56, domestic institutional investor confidence increased by 5.9% to 87.50, and foreign investor confidence decreased by 4.8% to 57.14.

In June 2022, the SET Index fluctuated within a narrow range of 1,557.61–1,660.01 due to concerns over global inflation and the increasing risk of an economic recession after the FED and ECB chairs signaled a rapid interest rate hike to curb inflation. As a result, in June, foreign investors sold a net of 29,990 million baht, marking the first net sale after continuous net buying since December 2021. However, the Thai market still received support from government measures to mitigate the impact of rising energy prices and support the tourism sector, resulting in the SET index closing at 1,568.33 points at the end of June 2022, down 5.7% from the previous month.

Key external factors to monitor include the FED's approach to handling inflation after it reached a 40-year high, the uncertainty of the Russia-Ukraine war, which remains a major risk to the economy, particularly regarding energy in Europe, and the recovery trend of the Chinese economy following the easing of lockdown measures. Domestic factors to watch include the trend of policy interest rate hikes by the Bank of Thailand, the persistently high inflation from global energy prices and domestic raw material prices, and the COVID-19 Omicron variants BA.4 and BA.5 outbreak situation.”