Investor confidence in Thailand's stock market rose slightly, buoyed by hopes of a smooth formation of a new government and continued recovery in tourism and the economy, a capital markets group said on Thursday.
A June survey by the Federation of Thai Capital Market Organisations (FETCO) showed its overall investor confidence index rose to 81.62 from 77.70 in May, moving back to the "neutral zone".
Foreign investor confidence increased 33% from the previous month, the FETCO said in the survey, which anticipated the market conditions over the next three months.
Foreign investors, however, have sold a net 110.5 billion baht ($3.15 billion) of Thai shares so far this year, during which the main stock index has lost about 11%, weighed by political uncertainty.
Thailand's parliament will soon vote for a new prime minister, tentatively on July 13, to form a new government after May's national election.
Prime ministerial frontrunner Pita Limjaroenrat of the winning Move Forward party, however, faces a battle in securing support from an unelected Senate to back him to become the primer.
"The market is hoping for a stable government. It likes stability," FETCO chair Kobsak Pootrakool told a briefing.
Kobsak also said the central bank was expected to raise its benchmark interest again, by a quarter point to 2.25%, at its next meeting on Aug. 2, as the tourism sector gathered strength.
The central bank has increased the key rate by a total of 150 basis points since August to curb inflation. ($1 = 35.13 baht) (Reporting by Orathai Sriring and Satawasin Staporncharnchai; Editing by Martin Petty)