Thai investor confidence hit by political turbulence
The Fetco Investor Confidence Index (ICI) for June 2025, which gauges expectations for the Thai stock market over the next three months, dropped to 58.5, marking a retreat into bearish territory. The survey, conducted between June 20-30, reflects growing concerns among investors about domestic instability, geopolitical tensions and persistent capital outflows.
Confidence dipped across investor groups. The ICI of retail investors was down 14.2% to 50.7, while that of institutional investors decreased 42.1% to 63.6 and foreign investors' ICI dropped 55.6% to 66.7.
The confidence of proprietary traders fell 61.9% to 28.6, becoming extremely bearish.
"Investor confidence is overshadowed by three main risks: domestic political uncertainties, international conflicts, and continued foreign fund outflows," said Fetco chairman Kobsak Pootrakool.
Throughout June, the Thai stock market experienced heightened volatility, weighed down by the intensifying Iran-Israel conflict, rising tensions on the Thai-Cambodian border, and political instability following the Constitutional Court's suspension of Prime Minister Paetongtarn Shinawatra on July 1.
The Stock Exchange of Thailand (SET) index closed June at 1,089.56 points, falling 5.19% from the previous month, with average daily trading volume at 39.7 billion baht.
Foreign investors were net sellers of 7.94 billion baht in June, pushing total foreign net outflows for the first half of 2025 to a staggering 78.7 billion baht.
In the first half, economic indicators showed signs of weakening across key sectors, including consumer spending, manufacturing and tourism.
Notably, 50% of newly opened restaurants have already shut down.
The SET index plunged by 22%, making it the worst-performing stock market globally, while South Korea's stock market led the world with a 28% gain.
According to SET data, foreign investors were net sellers of Thai equities, with net outflows of 79 billion baht year-to-date. This follows net sales of 417 billion baht in 2024, continuing a persistent trend of capital flight from the Thai market.
Looking forward, investors are watching the US-Thailand trade negotiations, especially after Washington extended its tariff decision deadline to Aug 1, noted Fetco.
Tensions in the Middle East, which may affect oil prices and threaten global economic stability, also warrant monitoring. Thailand's economic outlook is clouded by weakening exports, declining tourist arrivals, and a fragile government that may struggle to implement key policy initiatives, said Mr Kobsak.
"While the Federal Reserve's rate pauses and local stimulus measures have provided some cushion, investor sentiment remains fragile," he said.
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