On June 6, 2019, Mr. Paiboon Nalinthrangkun, Chairman of the Thai Capital Market Business Council (FESCO), revealed that the investor confidence index for June 2019 showed a 16.56% decline in confidence for the next three months, bringing it to a level of 87.20. This marks the third consecutive month of decline and the lowest level in two years since August 2017. Investors are concerned about the prolonged trade war between the United States and China, as well as the political situation in the country, particularly the formation of a new government, which may delay the consideration of the 2020 government budget. However, some investors believe that stable politics and ongoing government policies could support investment confidence.

          “The vote for the Prime Minister is expected to positively impact investment, and the outcome is likely to align with market expectations of retaining the current Prime Minister. The direction of the new government formation is believed to proceed smoothly, as the Palang Pracharat Party has already secured a majority of votes. This could lead to an influx of foreign capital back into the stock market of approximately 60 billion baht in the second half of the year, averaging 10 billion baht per month. However, this depends on the government's ability to manage its 254 votes in the House to push forward important economic policies,” he stated. Nevertheless, he urged the new government to implement measures to stimulate the economy through consumption, as the current Thai economy and exports are slowing due to the impacts of the trade war. The new government must take care of and stimulate the economy to create momentum, as well as expedite large-scale investment projects, particularly in the Eastern Economic Corridor (EEC), to build investor confidence.

          Ms. Ariya Tiranaprakij, Deputy Managing Director of the Thai Bond Market Association, commented on the signals from the U.S. Federal Reserve regarding a potential easing of monetary policy, combined with a clearer political situation in Thailand, leading to a significant inflow of foreign capital into the Thai bond market. This is reflected in May 2019, where net sales reached 50 billion baht, with net sales remaining at 26 billion baht as of June 5, 2019.

          “Regarding the investor survey on the interest rate forecast for June 2019, it is anticipated that the Monetary Policy Committee (MPC) will likely maintain the policy interest rate at 1.75%, while still considering the economic growth rate, global interest rate trends, and inflation rates.”

 

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