Economic stimulus measures and economic recovery to boost sentiment while political uncertainty and economic slowdown undermine
Kobsak Pootrakool, chairman of the Federation of Thai Capital Market Organizations (FETCO), revealed that the FETCO Investor Confidence Index (FETCO ICI) in August 2024(conducted during 20-31 August 2024), which anticipated the market condition over the next three months, is at 132.51, hovering back to “bullish” zone.
The top three most supportive factors comprise of the government’s economic stimulus measures, local economic recovery and positive sign driven by clearer political development. Political situation, though clearer but uncertainty remains, still undermines confidence the most, followed by local economic slowdown and inflation.
Highlights of FETCO Investor Confidence Index surveyed in August 2024 are as follows.
- Overall FETCO Investor Confidence index for the next three months (December 2024) is in “bullish” zone (120-159 of FETCO ICI Criterion)at 132.51.
- Confidence of investors across investor types is in “bullish” zone.
- Most attractive sector is Commerce (COMM).
- Least attractive sector to investors is Automotive (AUTO).
- Most influential factor driving the Thai stock market is the government’s stimulus measures.
- Most important factor impeding the Thai stock market is local political uncertainty.
“The survey results in August 2024 show that retail investors’ confidence jumps 73.6 percent to 144.26, proprietary investors up 28.4 percent to 144.44, institutional investors up 32.0 percent to 120.00 and foreign investors up 275 percent to125.00.
During the first half of August, SET Index was fluctuated and slipped below 1,300 mark as political uncertainty arose after the Constitutional Court dissolved the Move Forward Party while Srettha Thavisin was dismissed as Prime Minister after thecourt ruling. Driven by improving tourism, private consumption and exports, Thailand’s economy grew by 2.3 percent on year.
However, the better-than-market anticipation GDP growth could not hold off the downside. SET Index rebounded in the latter half of the month as the appointment of the 31st Prime Minister was getting clearer while the government’s digital wallet scheme seemed to make some progress and the Fed showed sign of cutting its policy rate.
At month-end, SET Index closed at 1,359.07, up 2.9percent from the previous month with an average daily trading volume of THB 44,404 million. Foreign investors were net sellers of THB 6,133 million and they have cashed out THB 123,692 million year to date.
External factors to monitorinclude the Fed’s monetary policy on easing its rate in its next meeting and escalating tensions in the Middle East. Locally, eyes are on the establishment of the new cabinet, the government’s economic policy, which is expected to boost investment. This includes the establishment of Vayupak Fund to boost the Thai capital market. However, flood situation in the North of Thailand may impact the slowing economy.
Related News : Thailand Industry Sentiment Index (TISI) in July was first rise in four months
