Market sentiment still bullish
Confidence remains despite index slip
Investor confidence in stocks remains bullish, supported by the improving pandemic situation, accelerated vaccine distribution, and better prospects for the local economic recovery.
The wave of Covid-19 spreading within the country, the upcoming cut of the policy interest rate by the Bank of Thailand's Monetary Policy Committee, and uncertainty surrounding the Federal Reserve's direction in asset purchases are the strongest negative factors weighing on market sentiment.
Paiboon Nalinthrangkurn, chairman of the Federation of Thai Capital Market Organizations (Fetco), said the Investor Confidence Index in September, which anticipates market conditions over the next three months, is at 142.71, down 1.1% from the previous month, but remains in bullish territory.
The increase in the Covid-19 vaccination rate is viewed as the most supportive factor, followed by the improving pace of local economic recovery and more fund inflows.
According to respondents, the most attractive sector is commerce, while the least attractive sector is fashion.
Mr Paiboon recommended investors monitor external factors such as the Fed's direction for quantitative easing at its upcoming meeting in November and China's economic recovery, which may be slowed by a power shortage in the country.
He said investors also need to monitor the lockdown measures in several Asean countries, such as Vietnam and Malaysia, as they could impact industrial production in the region.
For internal factors, Mr Paiboon is watching the progress of Thailand's reopening and vaccination distribution, which are key catalysts for the revival of the tourism industry and the country's economic recovery.
He said the outlook for the Thai stock market in the fourth quarter is expected to remain upbeat.
He projects the SET Index in 2021 to remain in a range of 1,600-1,650 points, supported by proper control of inflation.
Mr Paiboon expects Thailand's GDP this year to grow 1%, gaining 4-6% next year.
He said the weakening baht will boost exports, helping narrow the country's current account deficit.
More vaccine options becoming available in the fourth quarter should improve Thai investor confidence, said Mr Paiboon.