December 12, 2024
BANGKOK – Investor confidence has cooled to a “neutral” zone, according to a monthly report by the Federation of Thai Capital Market Organizations (FETCO), as market participants await government economic stimulus measures and tourism recovery while international conflicts and local economic slowdown create uncertainty.
The FETCO Investor Confidence Index (ICI) for February 2025 stood at 118.28, within the neutral range of 80-119, as revealed in a report released on Wednesday.
FETCO chairman Kobsak Pootrakool highlighted the survey conducted from November 20-30, which assessed market conditions for the next three months. The index reflects a delicate balance of opportunities and challenges.
Key factors shaping investor sentiment:
- Government stimulus: The government’s economic stimulus package is seen as a key driver of investor optimism.
- Tourism recovery: The rebound in the tourism sector is expected to contribute positively to economic growth.
- International conflicts: Ongoing geopolitical tensions, particularly the Russia-Ukraine conflict, remain a significant concern for investors.
- Domestic economic slowdown: Concerns over the pace of economic recovery and inflationary pressures are weighing on sentiment.
- US monetary policy: The Federal Reserve’s monetary policy decisions, including interest rate hikes, will continue to impact global financial markets.
Investor confidence breakdown:
- Retail, proprietary, and institutional investors: Confidence among these investor groups has weakened, moving into the “neutral” zone.
- Foreign investors: Foreign investors remain relatively optimistic, with their confidence index in the “bullish” zone.
According to FETCO, while the Thai stock market witnessed a modest increase in the first half of November due to strong corporate earnings, the US presidential election and subsequent concerns over US trade policy dampened sentiment. Foreign investors were net sellers in November, contributing to the overall market decline.
Going forward, investors will closely monitor developments in the US, including the implementation of new trade policies and the direction of US monetary policy.
Locally, the progress of economic recovery, government stimulus measures, and the impact of the tax-saving season will also be key factors influencing market sentiment.
As the global economic landscape remains uncertain, investors are advised to exercise caution and diversify their portfolios to manage risk.