Capital-market investors have a more positive view of the economy from May to July, believing government policies should bear fruit and the tourism industry would recover by then, according to a survey.
The forward investor confidence index for the three months rebounded to a neutral territory after a three-month slump, buoyed by the anticipated impacts of public policies and tourism recovery.
The Investor Confidence Index (ICI) rose by 42% to 80.40 from April's 56.7, 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.
ICIs for retail investors, proprietary traders and local institutional investors rose into the neutral zone.
Foreign investor ICI rose slightly but remained in a bearish territory.
“April survey results show that Fetco’s ICI increased into the neutral zone after being bearish for three consecutive months. ICIs for all groups of investors climb into the neutral zone, except for foreign investors, which despite increasing slightly, still remain bearish,” said Fetco chairman Paiboon Nalinthrangkurn.
The survey found that investors see government policies as the most encouraging factor, followed by domestic economic growth, the recovery of tourism and the development of a Covid-19 vaccine, said Mr Paiboon.
Investors are, however, still concerned about the performance of SET-listed companies, as well as domestic economic conditions, capital flows, and a possible second virus outbreak, he said.
Survey results from the Interest Rate Expectation Index reflects how market participants expect the policy interest rate will likely be cut from the current 0.75% at the next Monetary Policy Committee (MPC) meeting scheduled on May 20.
Yields on 5-year and 10-year government bonds are seen as likely not to increase over the 10 weeks, according to the Fetco survey.
These sentiments result from respondent's expectations that even though the MPC cuts the policy interest rate, there may be an increased supply of government bonds to finance economic stimulus measures aimed at mitigating the effects of the lockdown, said Ariya Tiranaprakij, senior executive vice-president at the Thai Bond Market Association.