ICI returns to “neutral”

Editorial Staff

ICI returns to “neutral” zone Investors expect fund inflow next three month

Kobsak Pootrakool, chairman of the Federation of Thai Capital Market Organizations (FETCO), said that the FETCO Investor Confidence Index (FETCO ICI) in November 2023(conducted during 20-30 November 2023), which anticipated the market condition over the next three months, is at 98.60, up 23.8 % from the previous month, returning to “neutral” zone.

Most supportive factor is fund inflow, followed by Fed’s keeping its policy rate steady and the government’s economic stimulus. However, local economic retreat, international conflicts and China’s economic situation undermine confidence.

The surveyed showed overall FETCO Investor Confidence index for the next three months (February 2024) is in “neutral” zone (80-119 of FETCO ICI Criterion), up 23.8 % from the previous month to 98.60.

Confidence of retail, proprietary and foreign investors is in “neutral” zone while that of institutional investors is in “bullish” zone.

Most attractive sector is Energy & Utilities(ENERG) while least attractive sector to investors is Finance and Securities (FIN).

Most influential factor driving the Thai stock market is fund inflow while most important factor impeding the Thai stock market is local economic retreat.

SET Index was fluctuated throughout the month given to concerns over ongoing Israel-Hamas conflict, uncertainty over Fed’s policy rate direction, worries over China’s economy especially property sector, and Thailand’s lower than expected 3Q GDP result, which expanded 1.5 % compared with 1.8 % rise in the second quarter.

At month-end, the SET Index closed at 1,380.18, down 0.1 % from a month earlier. Average daily trading volume in November was 45.80 billion baht.

Foreign investors continued their sell-off, cashing out 21.13 billion baht. Their net selling totaled 192.15 billion baht during Jan-Nov.

External factors to monitor include volatility in global financial market, that may impact commodities prices such as oil and gold, Israel-Hamas conflict, China’s economic stimulus and weakening yields of foreign government bonds, which may trigger fund inflow to emerging market.

Locally, the cabinet’s approval to establish Thai ESG fund added positive cue to sentiment as the fund is expected to attract over 10 billion baht worth of fund inflow to the capital market in December 2023. Eyes are also on the 2024 fiscal budget approval, which could drive the economy further.

However, investors are cautious on the unclear disbursement of the 10,000-baht digital wallet scheme and uncertainty in tourism situation during high season as the number of tourists from China is expected to be lower than expected.”