The Federation of Thai Capital Market Organizations's (Fetco) Investor Confidence Index (ICI) retreated to the bearish zone last month, dragged down by concerns over intensified geopolitical conflicts, the direction of the Federal Reserve (Fed) and Thailand's slowing economy.
Chairman Kobsak Pootrakool revealed that the ICI for July, which anticipates market conditions over the next three months, was 60.40, entering the bearish zone.
The survey, which was conducted during July 20-31, found that retail investors' confidence declined 11.3% to 83.10, while the figures for institutional and foreign investors were down 17.4% and 55.6%, respectively, to 90.91 and 33.33.
Meanwhile, proprietary investors' confidence rose 96.9% to 112.50.
"Investors view that the government's stimulus measures would help boost confidence the most, followed by the economic recovery, especially the tourism sector. However, international conflicts, the Fed's policy and Thailand's economic slowdown are the three most concerning factors," Mr Kobsak said.
"Investors view tourism and leisure as the most attractive sector, while the automotive sector is the least attractive," Mr Kobsak added.
The Stock Exchange of Thailand (SET) in July was supported by positive cues such as slowing inflation in the US, which led the market to anticipate a Fed interest rate cut. In addition, the SET imposed the uptick rule to tackle short selling transactions and the government's digital wallet scheme made progress.
Negative factors are the World Bank's downgrading Thailand's 2024 economic growth forecast to 2.4%, from 2.8% previously, and dented investor confidence following recent governance-related breaches.
The SET index managed to close at 1,320.86 points, up 1.5% from the previous month, with daily trading averaging 44.12 billion baht. Foreign investors were net sellers of 1.58 billion baht. They have cashed out 117.56 billion baht between January and July.
Mr Kobsak noted external factors to monitor include the Fed's monetary policy on easing rates, the US elections following Donald Trump's assassination attempt and Joe Biden's withdrawal from the presidential race, China's stimulus measures for the capital market to revive confidence and conflicts in the Middle East.
Domestically, eyes are on listed companies' earnings, the government's digital wallet scheme and the political situation.