The Stock Exchange of Thailand (SET) should add high-potential stocks while the government needs to solve the country's structural economic problems to make the exchange more appealing to foreign investors, according to the Investment Analysts Association (IAA).
IAA chairman Paiboon Nalinthrangkurn, who is also chief executive of Tisco Securities, said the SET has lost its attractiveness because the investment rate of return has been less than 1% per year over the past decade, while Thai GDP grew at a slower pace than other regional economies.
"Over the past several months, retail investors have started to give up on the Thai bourse and many foreign funds announced their closure because of outflows with few new inflows," Mr Paiboon posted on his Facebook page.
"This phenomenon should make us to think whether the Thai stock market is worth the investment."
To justify investment in a bourse, it should consistently provide returns that are worth the risks, he said.
"It is not necessary to have a positive return every year, but at least over 10 years the average should be 5-10% annually," wrote Mr Paiboon.
During 2014-23, the Thai stock market provided a return of 9%, meaning it averaged less than 1% per year.
The Vietnam bourse posted a return of 124% over the period, Indonesia's exchange returned 70%, and the bourses of developed Asian economies tallied 91% for the period.
The US Nasdaq Exchange returned 259% over the same period.
"It was a disappointing decade. It's not surprising foreigners have continued to be net sellers of Thai stocks worth more than 1 trillion baht," he wrote.
To tackle this issue, Mr Paiboon recommended the Thai stock market quickly increase the proportion of high-potential stocks in the bourse, such as those in the medical, tourism, technology and new S-curve business sectors.
"The chances the Thai stock market will provide a return on par with our peers are high given that US interest rates are expected to decline and listed companies' earnings are recovering. In addition, fiscal budget disbursement will begin soon, providing additional liquidity to stimulate the economy, which should prompt foreign funds to start flowing back in again," he said.
"I still believe in the potential of the Thai stock market, but a lot of work needs to be done by those in charge."