Investor confidence for the next three months has fallen into neutral territory, muted by tensions over the Sino-US trade row and concerns on global monetary policies, says the Federation of Thai Capital Market Organisations (Fetco).
The investor confidence index (ICI) for November to January has dipped 7.23% to 113.73 from 120.60 in September, with confidence for all investor groups falling into the neutral zone, said Fetco chairman Paiboon Nalinthrangkurn.
Earlier the ICI moved into bullish territory for the first time in seven months, buoyed by clearer developments on Thailand's general election and previous export gains.
A figure below 80 points is considered bearish, 80-120 is neutral and over 120 is bullish.
The US Federal Reserve's monetary policy proved to be the biggest drag on investment sentiment on the Thai bourse, while the Trump administration's trade policy presented the most concern for future investment incentives, said Mr Paiboon.
"This year is the worst for investment and October was also the most difficult investment period. The Stock Exchange of Thailand index fell last month based on a downward trend in the Dow Jones Industrial Average, which dropped by 10%," he said.
Mr Paiboon said market participants expect Democrats to win the US midterm election, which would make it difficult for the Republicans to pass legislation for the two remaining years of the Trump administration.
Pressure from the Sino-US trade row could also ease given a defeat by the Republicans, he said.
"For investment trends over the next three months, the survey indicates investor confidence could be buoyed by listed companies' performance and Thailand's economic growth, with the Fiscal Policy Office projecting GDP to remain at 4.5% despite a 5.2% drop in September's exports," said Mr Paiboon.
Energy and utilities are viewed as the sectors offering the most interesting investment opportunities, while media and publishing are the most unattractive investment segments, he said.
Somprawin Manprasert, chief economist and executive vice-president at Bank of Ayudhya (BAY), said the bank expects the Bank of Thailand's Monetary Policy Committee (MPC) to raise the interest rate by 25 basis points next month, with another 25-point rate hike anticipated before the end of 2019.
MPC members signalled an interest rate hike during their September meeting, with two voting for such a move, said Mr Somprawin. GDP growth is expected at 4.7% this year, dropping to 4.2% next year as export growth falls, he said.