Thailand’s stock market is approaching a critical juncture, highlighting the urgent need to restore investor confidence and market liquidity, according to the head of the Investment Analysts Association (IAA), who has called for swift and decisive government action.
Paiboon Nalinthrangkurn, IAA chairman and a board member of the Stock Exchange of Thailand (SET), warned that the Thai bourse risks losing its effectiveness as a key channel for capital formation and wealth creation.
In a Facebook post, Mr Paiboon said the equity market may no longer be able to fulfil its traditional role of mobilising capital and supporting long-term economic growth.
“If these issues are not addressed seriously and in a timely manner, the impact could extend beyond the capital market and threaten the long-term sustainability of Thailand’s economic system,” he said.
The SET ranked among the worst-performing stock markets globally in 2025, with the benchmark index falling 10% while global equities rose about 21%. Thailand was one of only six markets worldwide to post negative returns last year.
The decline marked a third consecutive year of losses for Thai equities, with a cumulative drop of 24% over three years, erasing an estimated 4.25 trillion baht in market capitalisation.
Over the same period, global markets experienced a strong investment cycle supported by accommodative monetary policies, delivering cumulative gains of around 60%. This divergence underscores the opportunity cost faced by Thai investors, Mr Paiboon said.
Market liquidity has fallen by 54% compared with four years ago, bringing the market closer to a point where large foreign institutional investors may view it as effectively non-investable due to insufficient trading depth.
Mr Paiboon described the sharp decline in initial public offering (IPO) activity as one of the most troubling indicators. Funds raised through IPOs dropped by 93%, from 136 billion baht five years ago to just 9 billion baht last year.
“In practical terms, the SET is nearing a danger zone where it may no longer be able to perform its core economic functions effectively,” he said. This comes as Thailand faces the challenge of restructuring its economy and developing new growth drivers—efforts that typically involve higher risks and require a robust capital market rather than reliance on bank lending alone.
While the Thai stock market still has potential to recover, Mr Paiboon said it is unlikely to do so without strong and credible government support.
Stock indices reflect investor confidence and expectations, he noted, and with weak economic growth, declining earnings, capital outflows, and low investor confidence, the market lacks the momentum to rebound independently.
Mr Paiboon urged the new government to focus on two key priorities. The first is restoring confidence in both the stock market and the broader economy through credible and achievable policies that address structural weaknesses, promote investment in future industries, and signal Thailand’s ability to return to sustainable annual growth of around 4%, with the capital market playing a central role.
The second priority is reviving market liquidity, beginning with domestic investors, as liquidity has been drained by foreign selling and capital outflows.
Confidence alone is not enough without clear incentives, he said, suggesting measures such as a well-structured Thai Individual Savings Account and tax incentives to encourage the repatriation of overseas investments. While these steps may reduce tax revenue in the short term, they could boost liquidity quickly and deliver longer-term gains through increased wealth creation and stronger economic growth.
He also said the SET must address retail investors’ concerns over market fairness—particularly issues related to high-frequency trading and short selling—through greater transparency, proactive communication, and enforceable regulations to rebuild trust in the market.