Investor confidence in the Thai stock market rose slightly in June, buoyed by hopes of a smooth formation of a new government and continued recovery in tourism and the economy, a capital markets group said on Thursday.
The June survey by the Federation of Thai Capital Market Organisations (Fetco) showed its overall investor confidence index rose to 81.62 from 77.70 in May, moving back to the “neutral zone”.
Foreign investor confidence increased 33% from the previous month, Fetco said in the survey, which anticipates market conditions over the next three months.
Foreign investors, however, have sold a net 110.5 billion baht worth of Thai shares so far this year, during which the SET Index has lost about 11%, weighed by political uncertainty.
Parliament will start voting for a new prime minister next Thursday. Pita Limjaroenrat of the winning Move Forward party, however, faces a battle in securing support from the unelected Senate to back him to become the premier. As many as three votes could be held by July 20 if the first vote is not conclusive.
“The market is hoping for a stable government. It likes stability,” Fetco chairman Kobsak Pootrakool told a briefing.
Mr Kobsak also said the Bank of Thailand was expected to raise its benchmark interest rate again, by a quarter point to 2.25%, at its next meeting on Aug 2, as the tourism sector has gathered strength.
The central bank has increased the key rate by a total of 150 basis points since August to tame inflation, which has now fallen below 1% year-on-year.