Thai Investor Confidence Holds Steady Amid Economic Concerns

Investor confidence in Thailand remained in a "neutral" zone in May 2025, buoyed by hopes of government stimulus and domestic economic recovery, but tempered by concerns over sluggish local growth and global trade tensions.

The latest FETCO Investor Confidence Index (ICI), compiled by the Federation of Thai Capital Market Organizations (FETCO), registered 110.36 for May 2025.

The survey, conducted between May 19 and 31, anticipates market conditions over the next three months.

Kobsak Pootrakool, Chairman of FETCO, stated that government stimulus packages were the primary positive influence, followed by an anticipated local economic recovery and incoming fund flows.

Conversely, the "sluggish Thai economy" was identified as the most significant drag on sentiment, alongside the ongoing trade war and concerns over fiscal discipline.

Key Findings from the May 2025 Survey:

• The overall FETCO ICI for the next three months (to August 2025) sits in the "neutral" zone at 110.36 (with the neutral range defined as 80-110.36).
   
• Retail and proprietary investors expressed "bearish" confidence.
• Institutional investors showed "neutral" confidence.
• Foreign investors were notably "bullish".
• The Banking (BANK) sector was deemed the most attractive to investors.
• The Automotive (AUTO) sector was the least attractive.
• Government stimulus packages were identified as the leading factor boosting the Thai stock market.
• Local economic retreat was cited as the most significant impediment.

Kobsak elaborated on the breakdown by investor type, noting an increase in confidence among retail investors (up 38.5% to 59.09) and proprietary investors (up 25.0% to 75.0).

However, institutional investors saw a dip (down 15.9% to 110.00). Foreign investor confidence, in contrast, surged by 125% to 150.0.

During May, the Thai capital market experienced volatility due to both domestic and international factors. While the easing of US trade policy provided some relief, slower-than-expected local economic growth dampened spirits.

The Office of the National Economic and Social Development Council (NESDC) has revised Thailand’s 2025 economic growth forecast down to 1.8%, a significant cut from its earlier prediction of 2.8%.

Further reinforcing the economic slowdown, private consumption in the first quarter of 2025 expanded by only 2.6%, and industrial production over the past five quarters saw a meagre 0.5% increase. 
 

By month-end, the SET Index closed at 1,149.18, a 4% decline from the previous month, with an average daily trading volume of 42,474 million baht.

Foreign investors were net sellers, offloading 16,182 million baht in May, contributing to a total outflow of 70,749 million baht from January to May.

Looking ahead, external factors to monitor include the evolving US trade policy and the broader trend of global economic slowdown driven by trade disputes.

The potential for higher inflation could also impact interest rate decisions by major central banks. Domestically, political uncertainty continues to pose a risk to investor confidence and the implementation of government economic policies. Additionally, the recovery of inbound tourism, particularly from China, is expected to remain slow.