Thai investor confidence remains neutral for 5th month

The Federation of Thai Capital Market Organisations’ (FETCO) Investor Confidence Index (ICI) maintained its position in the neutral zone for the 5th consecutive month, registering 82.89 in June.

The index, which forecasts market conditions over the next three months, highlights that stimulus measures and companies’ earnings reports could potentially boost investor sentiment in the latter half of the year.

FETCO chairman Kobsak Pootrakool identified three key supportive factors: listed companies’ earnings, government stimulus, and tourism recovery. Despite these positive elements, investor confidence remains fragile due to concerns about a possible local economic retreat, ongoing fund outflows, and domestic political uncertainties.

“The survey results in June show that investors’ confidence declined, led by a drop of 25% among foreign investors to 75, while that of institutional investors contracted 10% to 110.”

Retail investors’ confidence also decreased by 3.3% to 93.65, while proprietary investors saw an increase of 42.9% to 57.14.

In the first half of June, the Stock Exchange of Thailand (SET) experienced a downturn due to concerns surrounding Constitutional Court cases involving Prime Minister Srettha Thavisin and the Move Forward Party. However, the market saw a mild rebound later in the month, spurred by positive reactions to the revision of investment conditions for Thai ESG funds and plans to revive the Vayupak Mutual Fund.

By the end of June, the SET index closed at 1,300.96, marking a 3.3% decline from the previous month. The average daily trading volume stood at 45.24 billion baht. Foreign investors were net sellers of 34.34 billion baht, bringing their year-to-date net selling total to 115.98 billion baht.

External factors that investors should monitor include global central banks’ easing of monetary policies as inflation decreases, the upcoming US elections, European parliament polls, and ongoing geopolitical conflicts, Kobsak advised.

Domestically, the government’s stimulus package aimed at bolstering exports and domestic consumption, along with budget disbursement expected to drive economic growth in the second half, are critical areas of focus. Additionally, the progress of the new Thai ESG fund is under close watch.

Kobsak also emphasised the importance of measures to revive investor confidence, which are anticipated to decelerate the sell-off by foreign investors and support the recovery of the domestic stock market, reported Bangkok Post.