Investor confidence for the next three months has slightly increased, supported by positive political sentiment, domestic economic growth recovery and a positive performance by SET-listed companies, says the Federation of Thai Capital Market Organizations (Fetco).
Fetco's investor confidence index (ICI) stayed in the neutral range for a fifth consecutive month, said chairman Paiboon Nalinthrangkurn.
The ICI rose 1.24% to 109.45 this month, up from August's 108.11, in tandem with Thailand's gradual economic recovery and good earnings posted in the first half by listed firms.
A figure below 80 points is considered bearish, 80-120 is neutral and over 120 is bullish.
The ICI survey showed the banking industry is the most interesting sector for investors, with the media industry the least attractive.
Foreign investors' confidence declined to 128.57 from last month's 150, while confidence among other types of investors increased slightly.
"Net sales [of Thai equities] from foreign investors declined for three consecutive months after the highest net sales in May," said Mr Paiboon.
He said factors derailing investor confidence are geopolitical conflicts, an increase in import duties between the US and major trading partners, as well as capital outflows.
Investors are keeping a close watch on the trade negotiations between the US and its major trading partners, with concerns over negotiation outcomes affecting emerging market economies, such as Turkey and Argentina, said Mr Paiboon.
The US Federal Reserve's interest rate normalisation and a possible slowdown in the Chinese and eurozone economies are other factors keeping a lid on investor confidence, he said.
Investment Analysts Association secretary-general Sombat Naravutthichai said a survey that interviewed 28 fund managers and investment analysts, demonstrates that half of them expect the Stock Exchange of Thailand (SET) index to move sideways in the short run, with the index projected to be at 1,735 points on average this month.
In the long term, the SET index is anticipated to move along a range of 1,647 and 1,819 points, while the year-end target is expected at 1,794 points, said Mr Sombat.
Expected earnings per share (EPS) is at 109.58 baht, while EPS growth at the end of this year is projected at 10.2%. Average forward price-to-earnings ratio is anticipated at 16.03 times.
Ariya Tiranaprakit, senior executive vice-president at the Thai Bond Market Association, said the interest rate expectation index for September shows that investors expect the policy interest rate to be kept at 1.5% this month, supported by how Thailand's economy is poised to continue expanding and domestic inflation is projected to rise gradually.
KTB Securities chairman Win Udomrachtavanich said there is a high possibility that interest rate will rise in the future, especially when there have been capital outflows from emerging market economies.