The Federation of Thai Capital Market Organizations' (Fetco) Investor Confidence Index (ICI) remained in the neutral zone for a fifth consecutive month in June, though it noted that stimulus measures and companies' earnings reports could improve the sentiment in the second half.
While three of the most supportive factors are listed companies' earnings, government stimulus and the tourism recovery, investors are concerned that a local economic retreat might tarnish confidence, while fund outflows continue amid domestic political uncertainties, according to Fetco chairman Kobsak Pootrakool.
The June index, which anticipated market conditions over the next three months, was 82.89, remaining in a neutral zone as weak production and exports dampened confidence, causing the benchmark index to fall below the 1,300-mark during the middle of the month, he said.
"The survey results in June show that investors' confidence declined, led by a drop of 25% among foreign investors to 75, while that of institutional investors contracted 10% to 110," said Mr Kobsak.
Retail investors' confidence was also down 3.3% to 93.65, while that of proprietary investors rose 42.9% to 57.14.
The Stock Exchange of Thailand (SET) headed south in the first half of June on concerns about the Constitutional Court cases against Prime Minister Srettha Thavisin and the Move Forward Party.
The bourse rebounded mildly in the latter half as the market reacted positively to news that the investment conditions of Thai ESG funds would be revised, while a plan to revive the Vayupak Mutual Fund was welcomed.
At the end of June, the SET index closed at 1,300.96, down 3.3% from the previous month with an average daily trading volume of 45.24 billion baht. Foreign investors were net sellers of 34.34 billion baht, and their year-to-date net selling totalled 115.98 billion baht.
Mr Kobsak said external factors that investors should monitor include central banks worldwide easing monetary policy as inflation subsides, the US elections and European parliament polls, as well as ongoing geopolitical conflicts.
Domestically, all eyes are on the government's stimulus package to support exports and domestic consumption, budget disbursement, which is expected to drive the economy in the second half, and the progress of the new Thai ESG fund.
Also, they should track the progress of measures to revive investor confidence, which is expected to slow the speed of foreign investors' sell-off and help revive the domestic stock market, Mr Kobsak said.