The Federation of Thai Capital Market Organizations' (Fetco) Investor Confidence Index (ICI) remained in the neutral zone in March as the market expects more economic stimulus, while fund outflows continued and delays to the US Federal Reserve's interest rate cuts undermined sentiment.
Fetco chairman Kobsak Pootrakool said the ICI for March, which anticipates market conditions for the next three months, was at 106.91, barely changed from February.
Investors are hopeful that the government's stimulus package and a local economic recovery can lead to fund inflows, said Mr Kobsak.
The Fed has been keeping the US policy rate steady and international conflicts have held back confidence, resulting in continuing fund outflows, he said.
The confidence of institutional investors is in the bullish zone while that of retail, proprietary and foreign investors is in the neutral zone. The most attractive sector is tourism and leisure, while property development is the least attractive.
The Stock Exchange of Thailand (SET) index moved in a tight range between 1,359.26 to 1,394.93 points in March as the market "looked for fresh cues while foreign investors had yet to return", Mr Kobsak said. However, the market was brought to life after the Bank of Japan ended an era of negative interest rates, while the Fed kept its policy rate unchanged at 5.25-5.50% as expected with indications that rates will likely be cut three times in 2024.
At month-end, the Thai index closed at 1,377.94, up 0.5% from a month earlier. The average daily trading volume was 45.7 billion baht. Foreign investors were net sellers of 41.2 billion baht and accumulatively cashed out 68.8 billion baht in the first quarter.
Investors are monitoring interest rate moves by key global central banks such as the Fed, European Central Bank and Bank of England as inflation has been in decline, Mr Kobsak noted.
He said the Russia-Ukraine conflict will impact assets perceived as a strong safe haven such as gold, which has continued to rise in price. In addition, China's manufacturing activity rebound supports Thailand's exports.
Locally, the Bank of Thailand is facing rate cut calls to help stimulate economic recovery and shore up the stock market. Eyes are also on the tourism recovery, the government's fiscal budget disbursement and clarity on the government's 10,000-baht digital wallet scheme, Mr Kobsak added.