The Investor Confidence Index (ICI), measured by the Federation of Thai Capital Market Organizations (Fetco), improved to the neutral zone last month from bearish sentiment a month earlier, supported by the government stimulus package, while fund outflows were the biggest drag.
The January index, which anticipates market conditions over the next three months, rose slightly to neutral at 91.8 points, with the most influential factor driving the Thai stock market the government stimulus package, followed by listed companies' financial results.
"The most important factor impeding confidence in the Thai bourse is fund outflows, followed by the local economic slowdown and China's economy," said Fetco chairman Kobsak Pootrakool.
The confidence of institutional investors gained 42.9% to 111 and that of foreign investors rose 33.3% to 100.
Meanwhile, the retail ICI was down 6.1% to 80.5, and that of proprietary investors decreased 14.3% to 60.
Visitors look at sales campaigns at a housing expo. Investor confidence rose slightly in January thanks to state stimulus packages. (Photo: Varuth Hirunyatheb)
In January, the Stock Exchange of Thailand (SET) index headed south throughout the month, pressured by maturing long-term equity fund redemption, foreign investor outflows and concerns over international trade and investment in anticipation of the US's tariff policy.
At the end of January, the SET index closed at 1,314.50 points, down 6.1% from the previous month with an average daily trading value of only 39 billion baht.
Foreign investors were net sellers of 11.5 billion baht, said Mr Kobsak.
The key external factor to monitor is the US trade war against Canada, Mexico and China, according to Fetco.
"This may impact inflation and the Federal Reserve's decision on interest rates, while political uncertainty in France and Germany may push the European economy into recession," he said.
Investors should also monitor how Beijing's capital market stimulus yields results following the plan to encourage insurers and funds to increase their investment in the Chinese stock market over the next three years.
Locally the focus is on domestic consumption growth following the government's stimulus package, as well as public investment direction and the interest rate policy of the Bank of Thailand, said Mr Kobsak.
Additional earnings results are expected to be released by listed companies, he said.