The Federation of Thai Capital Market Organizations (Fetco) is preparing to propose to the Finance Ministry reviving long-term equity funds (LTFs) and adjusting the investment conditions for Thailand ESG funds to attract more investment into the local bourse.
Chairman Kobsak Pootrakool said Fetco is preparing to hold talks with the ministry about shortening the investment period for Super Savings Funds (SSF) from 10 years, or even cancelling SSFs and bringing back LTFs, which were discontinued in January 2020.
"We are delighted the new finance minister, a former chairman of the Stock Exchange of Thailand [SET], mentioned reviving LTFs, which Fetco has always supported because it will support long-term savings and investments in Thai stocks," said Mr Kobsak.
Fetco also slashed its year-end target for the SET index to 1,537 points from 1,590 points, as the US Federal Reserve has delayed any interest rate cuts. As a consequence, the global economy is likely to slow, with the financial sector remaining volatile, he said.
The SET index has an opportunity to recover in the second half, supported by stimulus measures, rapid budget disbursement and a bustling tourism sector, while central banks in various countries will start to gradually cut rates towards the end of the year, said Mr Kobsak.
"Fetco believes the Bank of Thailand will consider a rate reduction at the appropriate time, based on data and future economic trends," he said.
The federation announced on Wednesday its Investor Confidence Index was in the neutral zone in April for a third consecutive month.
The index, which anticipates market conditions over the next three months, was 92.3 last month, while foreign investors held steady at 100.
Retail investor confidence was down 28.9% to 76.5, while proprietary and institutional investors dropped 31.9% and 13.1% to 77.8 and 123, respectively, according to Fetco.
The government's stimulus package is the most positive factor increasing confidence, followed by a local economic recovery and the uptick in tourism.
However, international conflicts, inflation and listed companies' earnings are undermining confidence, said Mr Kobsak.
After the Songkran holiday, the index plunged because of conflict between Iran and Israel, while the US economy grew by 1.6% in the first quarter, the slowest pace in two years and well below the market's expectation of 2.4%.
At the end of April, the SET index closed at 1,367.95, down 0.7% from the previous month with an average daily trading volume of 45.4 billion baht. Foreign investors returned as net buyers of 3.79 billion baht, although their net sales tallied 65.1 billion year-to-date.
External factors requiring monitoring include global interest rate trends and the conflict in the Middle East, he said.
Locally, all eyes are on short-term economic stimulus, clarity on the digital wallet handout, and an expected rate cut in the second half, said Mr Kobsak.