Foreign confidence in Thai economy drives up 3-month investor sentiment
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STOCK-INVESTOR sentiment for the next three months to September surged last month mainly on the high confidence of foreign investors in the improvement of the Thai economy, a survey found.
The Federation of Thai Capital Market Organisations’ Investor Confidence Index (ICI) sub-index for the next three months jumped by 11.75 per cent to 104.46 from 93.48 in June, said Kanate Wangpaichitr, president of Fetco.
A figure below 80 points indicates low confidence, 80-120 is neutral and over 120 is bullish.
Foreign investors’ confidence rose 29 per cent as they are bullish on the improvement of the Thai economy. However, political affairs in this country and the economic uncertainty in the European Union continue to put pressure on investor sentiment, he said.
The construction sector remains the most attractive for stock investors, while the fashion sector is the least attractive.
The survey showed that the “Brexit” referendum on June 23 had seriously affected EU and global markets, especially currencies, whose high volatility had affected the economies of EU countries that are trading partners with the United Kingdom.
Investors have moved into low-risk assets, which is positive to the Stock Exchange of Thailand, Kanate said.
In June, foreign capital inflows were Bt230 billion, but if counted from April to June, foreign fund flows were Bt670 billion, an increase of 19 per cent from the same period last year. The high capital inflows showed that foreign investors had increased their trade volumes in Thai stocks.
However, Fetco warned investors to be cautious ahead of two incidents. The first is the referendum on the draft constitution in August, which will be a critical factor in the recovery of the Thai economy in the second half. Investors should monitor the volatility of global financial markets in the second half as well.
The SET Index yesterday gained 0.88 per cent to 1,468.39 with turnover of Bt59.594 billion.
