May 11, 2020 / 10:30 AM / 17 days ago

Thai market investor confidence improves, rate cut seen -associations

* Overall confidence lifted by govt anti-virus measures

* Foreign investor mood still bearish, selling Thai assets

* Central bank seen cutting key rate by 25 bps this month

By Orathai Sriring and Satawasin Staporncharnchai

BANGKOK, May 11 (Reuters) - Thailand’s market investor confidence for the three months to July rose for the first time in five months on optimism about government measures to cushion the fallout of the coronavirus pandemic, a capital market association said on Monday.

A survey in April by the Federation of Thai Capital Market Organisations (FETCO) showed its investor confidence index rose to 80.4 from a record low of 56.7 in March.

While the overall index moved to the neutral zone, foreign investor confidence remained bearish, the federation’s chairman, Paiboon Nalinthrangkurn, told a briefing.

Concerns about listed firms’ earnings, economic recovery and the virus outbreak are weighing on sentiment, Paiboon said.

Thailand’s benchmark index has fallen about 18% this year to 1,287 points, with foreign investors selling about 173 billion baht ($5.38 billion) net of Thai shares. They have dumped 121 billion baht net of Thai bonds this year.

Southeast Asia’s second-largest economy is expected to contract 5.3% this year, its biggest shrinkage since the 1997/98 Asian’s financial crisis, the central bank has said.

“I think the economy will have a U-shaped recovery, improving in the fourth quarter,” Paiboon said.

The stock market could climb to 1,400 points by the end of this year, but the outlook for next year remains unclear, he added.

The government has announced billions of dollars of economic steps, including its latest package of 1.9 trillion baht, to mitigate the pandemic impact.

A separate survey by the Thai Bond Market Association showed the central bank is expected to cut its key rate by 25 basis points to a record low of 0.50% at the May 20 meeting to help the economy, said senior vice president Ariya Tiranaprakij.

The central bank has cut the rate four times since August, with the shock from the outbreak heaping more pressure on the economy.

Thailand has reported 3,015 infections and 56 deaths since its outbreak began in January. ($1=32.15 baht) ($1 = 32.1700 baht) (Reporting by Orathai Sriring; Editing by)

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