Recovering tourism and exports, backed by a weaker baht, along with growing fiscal budget disbursement could support a rebound of the Thai stock market in the second half this year after the index lost 2.7% year-to-date, one of the worst performers globally.
Soraphol Tulayasathien, senior executive vice-president of the Stock Exchange of Thailand (SET), said although the Thai index declined last month, funds have started to flow back as investor concerns over war in the Middle East and oil price trends have eased.
"Investors were less anxious over escalating geopolitical conflicts in the Middle East. Oil and gold prices soared last month as inflation may decline slower than expected," he said.
The baht was volatile against the dollar in April, with the local currency leading declines among Asian peers, Mr Soraphol told a briefing on Thursday.
Investors are monitoring US inflation and the Federal Reserve's decisions on interest rates.
At its last meeting, the Fed kept the policy rate on hold for a sixth consecutive meeting as chairman Jerome Powell warned the rate will remain high for longer.
In response, investors scaled back expectations for a Fed rate cut to only one or two times this year.
"However, the Thai economy in 2024 is set to grow at a faster pace than last year, propelled by private consumption and the tourism sector," said Mr Soraphol.
"Government spending will likely be another impetus for the remainder of this year after public spending and investment shrunk because of a delayed budget bill for fiscal 2024."
This progress encouraged analysts to raise the SET index's forward earnings per share from the end of last year, while the valuation of many Thai stock sectors remains below historical averages, he said.
In April, the SET index was down 0.7% on a monthly basis to close at 1,367.95 points, falling less than the regional averages. Year-to-date, the benchmark index dropped 2.7%.
The average trading value for the SET and Market for Alternative Investment rose from the preceding month to 44.5 billion baht, but dipped 5% year-on-year.
Foreign investors were net buyers of Thai shares tallying 3.79 billion baht in the month as their trading ratio remained the highest among investor types for 24 consecutive months.
The SET's forward price-to-earnings (P/E) ratio was 14.6 times at the end of last month, above the Asian bourses' average of 12.2 times.
The historical P/E ratio totalled 17.3 times, surpassing the Asian stock markets' average of 15.5 times.
The dividend yield ratio was 3.40%, exceeding the Asian stock markets' average of 3.18%.
Daily trading volume on the Thailand Futures Exchange (TFEX) averaged 459,746 contracts, down 8% from the previous month.
For the first four months of 2024, TFEX's daily trading volume dropped 21.6% year-on-year to 438,862 contracts.