Bangkok: Investor confidence in Thailand is on the rise as the Federation of Thai Capital Market Businesses (FETCO) reported a significant surge in its Investor Confidence Index for the upcoming three months, reaching a robust 165.89. This positions the index within the "very strong" category, indicating a positive outlook among investors who anticipate that capital inflows and robust corporate earnings will drive the Stock Exchange of Thailand (SET) index to 1,700 points. However, concerns related to domestic politics and international trade conflicts continue to weigh on the sentiment.
According to Thai News Agency, Mr. Paiboon Nalintrungkur, Chairman of FETCO, announced the August 2026 Investor Confidence Index, highlighting that individual investor confidence experienced a slight dip of 1.4% to 117.80, maintaining a "stable" classification. Meanwhile, securities firm account confidence saw a decrease of 6.7% to 155.56, categorized as "overheated." Conversely, domestic institutional investor confidence rose by 4.2% to 131.58, also considered "overheated." Notably, foreign investor confidence increased by an impressive 20.0% to 200.00, marking it as "very overheated."
The Transportation and Logistics sector emerged as the most attractive for investors, while the Media and Publishing sector was deemed the least appealing. Investors identified capital inflows, corporate performance, and government economic stimulus measures as key drivers of confidence. In contrast, domestic political issues and the ongoing trade war were seen as major deterrents.
In August 2026, the SET Index experienced an initial upward trend, buoyed by positive economic indicators such as better-than-expected GDP growth and robust private sector investment. However, the latter half of the month saw a reversal as foreign capital flows turned into selling pressure, driven by profit-taking following the SET's strong rise. Additional factors contributing to the decline included tensions in the Middle East, uncertainty surrounding the Federal Reserve's monetary policy, and persistently high global government bond yields. Consequently, the SET Index closed at 1,595.16 at the end of August, reflecting a 1.75% decrease from the previous month.
Globally, investors are closely monitoring potential shifts in the Federal Reserve's monetary policy, as well as developments in the Japanese yen and the Bank of Japan's policy stance. Geopolitical tensions in the Middle East, particularly regarding sanctions against Iran, continue to pose risks to energy supply and oil prices. Domestically, attention is focused on Thailand's economic recovery, the implementation of stimulus measures, and the 2027 government budget considerations. The impending Constitutional Court ruling on September 28, 2026, regarding the selection of senators and election ballot issues, adds to the political uncertainty.
Mr. Paiboon noted that global institutional investors currently hold minimal levels of Thai stocks due to previous selling trends. This situation presents a high likelihood of substantial capital inflows returning to the market. Analysts are optimistic, setting a year-end target for the SET Index at 1,700 points, driven by upward revisions in earnings per share (EPS) estimates for Thai companies, highlighting a shift from previous years of downward adjustments.
The Stock Exchange of Thailand's relaxed IPO criteria aim to attract innovative companies to raise capital domestically, fostering readiness for modern business developments and enhancing production efficiency. Despite a slight increase in Thailand's inflation rate for August 2026, Mr. Paiboon believes there is no immediate need for interest rate hikes, as the economy still benefits from supportive monetary policy measures.