Investor confidence for the three months through April plummets into a bearish territory for the first time in four years, dragged by concerns over dejected tourism outlook and geopolitical tensions.
The Investor Confidence Index (ICI) tumbled by 9.9% to 72.75 from January's 80.75, according to the monthly survey by the Federation of Thai Capital Market Organisations (Fetco).
An index below 80 points is considered bearish, 80-120 is neutral and over 120 is bullish.
“Confidence among most investor groups turns bearish. Confidence of brokerage firms and foreign investors declines into a bearish territory from last month’s neutral, while retail investors’ confidence climbs from bearish to neutral. Institutional investors’ confidence still remains bearish,” said Fetco chairman Paiboon Nalinthrangkurn.
The novel coronavirus outbreak denting Chinese tourist arrivals in Thailand is the primary concern among investors followed by geopolitical tensions in the Middle East, global economic recovery following the US’s phase 1 trade deal with China and the direction of global monetary policies.
The virus pandemic is expected to subside within three months and equities could see a strong rebound given such scenario, said Mr Paiboon.
The government’s fiscal 2020 budget disbursement, new economic policies aimed at stimulating private investment, exports and tourism, the depreciating baht, the Bank of Thailand’s monetary easing effects as well as two-way fund flows are internal factors warranted monitoring.
Factors deemed to shore up investor confidence include dividend payment of SET-listed companies, public policies and domestic economic growth trajectory following the US’s phase 1 trade deal with China.