Investor confidence rises on effective epidemic response

The confidence index of capital market investors in Thailand rose 42 percent last month on positive sentiment about the government’s apparent success in containing the coronavirus, while more companies were applying to issue bonds to raise funds.

The Investor Confidence Index (ICI) rose by 42 percent to 80.40 in April from 56.7 in March, according to the Federation of Thai Capital Market Organizations (FETCO), which conducts a monthly survey to gauge investor sentiment. An index below 80 points is considered bearish, 80-120 is neutral, and over 120 is bullish.

The index is forward-looking, measuring how investors believe the economy will perform during the next three months. The results provide a window into how players in the capital markets view the situation from May through July.

“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.

Beyond the numbers, survey respondents said that government policies in response to the pandemic were the most encouraging factor in their view. They also expect a return to economic growth and that tourism will recover in the coming months.

Meanwhile, the Thai Bond Market Association said that foreign investors have begun buying Thai bonds once again. While the amounts they have purchased remain relatively low at about $37 million, Tada Phutthitada, president of the association, said he believes that it represents a trend.

Thai companies are looking to capitalize on that trend. Ariya Tiranaprakit, executive vice-president of the association, said about ten companies have applied to issue corporate bonds worth about $1.5 billion over the next few weeks.

Photo courtesy of https://www.fetco.or.th