Smooth and quick transfer of power after election critical for wary Thai capital market

His remark came as Fetco released the its latest Investor Confidence Index (Fetco ICI) for April, which showed a 15.1% increase in activity at 110.09 from the previous month due to supportive factors such as the May 14 general election. 

Investors see the local general election as a great promising sign of the country's improvement, along with expectations of fund inflows and local tourism recovery, Kobsak said.

He said it was not as important who won the election as how quickly and smoothly the winner can form the cabinet, because it would have a great impact on the next national fiscal budget and the government's disbursement.

If the process goes flawlessly, the capital market's performance could be good as well, he noted. 

He explained that the country's capital market already had a number of external factors to consider. So, if the newly formed government can function effectively after the election, it would boost investor confidence in the Thai market.

Meanwhile, Kobsak indicated Fetco's willingness to collaborate with the government to support the country's economic growth, adding that the capital market can generate revenue for Thailand in addition to taxes. 

His comment came as some parties discussed possible taxation solutions to reshape Thailand's financial market, such as taxes on financial transactions and capital gains. 

Kobsak Pootrakool

Kobsak did not expressly oppose or support the ideas. He did, however, say that there were other methods for the government to benefit and profit from the capital market.  

Apart from domestic supportive factors, he noted that the country's financial markets were most concerned about the US Federal Reserve's hawkish monetary policy, high inflation, geopolitical tensions, and confidence in the banking sector. 

That's why overall Fetco Investor Confidence index for the next three months remains in “neutral” zone, he said.

According to the report, only foreign investors' confidence is up, rising 66.7% to 125.0, while in other types of investors it is down, falling 13.6% to 96.83 for retail investors, by 12.5% to 87.50 for proprietary investors, and by 14.3% to 112.50 for institutional investors.

He pointed out that foreign investors continued to be net sellers of 7.901 billion baht, totalling 63.960 billion baht in net sales year to date, with an average daily trading volume of 14.134 billion baht.  

In April, the SET Index fell 5% from the previous month to 1,529.12, weighed down by several factors, including slower-than-expected economic recovery in several countries, including Thailand, where the Fiscal Policy Office revised down the country's 2023 GDP forecast to 3.6% from 3.8 % previously projected.