Thailand : Investors’ confidence turns from bearish to neutral in May


INVESTORS overall are regaining some confidence in the Thai market even though foreign players are deserting it, according to the securities industry.

“Investor confidence in the next three months has changed from bearish to neutral in May because of greater tangibility in the government’s fiscal policies and the acceleration of its budget disbursements,” Voravan Tarapoom, chairwoman of the Federation of Thai Capital Market Organisations (FETCO) and chief executive officer of BBL Asset Management, said yesterday.

“The sectors that investors pay most attention to is public utilities followed by energy,” she said.

Foreign investors are net sellers because Thailand’s stocks are less appealing than those of the developed and North Asian markets.

Last month’s survey found the FETCO NIDA Investor Sentiment Index for the next three months improving 30.2 per cent from 78.90 points in April to 102.72 in May.

The index measures the confidence of all four types of investors – retail, institutional, proprietary and foreign – and ranges from 0-200 points, where 0 is extremely bearish and 200 is extremely bullish.

“Factors that investors said would affect their confidence in the next three months are economic policies and the real economic situation going forward, while the current political situation is not part of domestic individual and institutional investors’ concerns at the moment,” Voravan said.

Investor confidence should keep picking up in the second half of the year as the situations of the capital market and the economy improve because of increases in government spending, private investment and tourist arrivals.

Disbursement up

“Government spending has improved tangibly and spending is being used in the right way, while private investment has responded with movement.

“Things should be better going forward because tourism was the only industry that looked good and now there are government spending and private investment to look forward to,” she said.

The latest figures show that government spending in the first seven months ending in April of the 2015 fiscal budget had reached 58.4 per cent, with disbursement of the Bt449-billion investment budget climbing to 36.2 per cent.

This disbursement rate for investment is better than 35.7 per cent in 2012, 35.5 per cent in 2013 and 33.6 per cent in 2014.

The Thai stock market is currently “boring”. There is no clear high or low, Voravan said.

Thanomsak Saharatchai, executive vice president of investment research at KT-ZMICO Securities, said capital markets in Europe and Japan were more appealing for investors because of their quantitative-easing policies. North Asian markets such as South Korea and Taiwan also tell a better story, so foreign investors are trimming down their investment here.

“There is an outflow but it is not at an alarming rate and this is not hot money that is running towards the EU and Japan from emerging markets,” he said.

Foreign investors have unloaded a net Bt8.89 billion of Thai stocks from January 1-May 8.

The factors that will affect the Thai stock market in the second half of the year are the expectation and the actual raise of the US interest rate along with the internal political situation.

BBL Asset Management forecasts gross domestic product expanding by 3.5 per cent this year. The International Monetary Fund forecasts 3.7 per cent and KT-ZMICO 3.4 per cent.

Source : The Nation | May 12, 2015
Thomas D’Innocenzi

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