Thailand’s Stock Market Revival Plan Falters amid Foreign Investors Exodus – Thailand Business News

Thailand’s ambitious plan to revive its struggling stock market has hit a wall, with foreign investors accelerating their exodus. The Stock Exchange of Thailand (SET) Index has plummeted over 16% this year, marking it as the world’s worst-performing major index among 92 tracked globally. A key component of the revival effort, the Vayupak Fund, injected $4.5 billion into the market starting in August 2024, aiming to bolster local firms and restore confidence. Yet, seven months later, the SET Index has continued its downward spiral, shedding nearly 10% since the fund’s deployment began, with 50–60% of its resources already utilized.

Key Takeaways

• Thailand’s stock market has plunged 16% this year, making it the worst-performing among 92 global indices as foreign investors pull out $4.2 billion.
• Investor confidence remains weak due to concerns over high household debt, political instability, and the government’s ability to drive growth beyond tourism.
• The $4.5 billion Vayupak Fund has failed to stabilize the market, raising doubts about the effectiveness of state-driven investment initiatives.

Rising household debt, sluggish exports, and geopolitical tensions have compounded the challenges, leaving foreign investors wary of committing to the Thai market. Analysts warn that without a clearer roadmap for sustainable growth and structural reforms, the outflow of capital could further undermine the country’s economic recovery prospects.

Thailand’s ambitious effort to revive its struggling stock market is falling short, as deep-seated economic concerns fuel a sustained exodus of foreign capital. Despite introducing a series of reforms aimed at boosting investor confidence, including tax incentives and regulatory adjustments, the measures have yet to counterbalance the broader uncertainties plaguing the economy.

Seven months after the government injected $4.5 billion into the Vayupak Fund, analysts remain perplexed by its limited impact on the SET Index, the country’s benchmark stock gauge. 

The index has plummeted more than 16% this year, making it the worst-performing market among 92 global indices tracked by Bloomberg. 

Over the past 12 months, foreign investors have pulled out $4.2 billion, the largest outflow in Southeast Asia.

Confidence Erodes as Economic Worries Deepen

Investor sentiment remains fragile, driven by skepticism over the government’s ability to stimulate growth beyond the tourism sector. 

Additional concerns, including high household debt, political instability, and corporate scandals, further weigh the market. 

Meanwhile, former U.S. President Donald Trump’s renewed tariff war and a strengthening dollar have compounded pressures on emerging markets, prompting investors to withdraw capital.

Plodmechai added that while the government has signaled its commitment to rescuing the market, more decisive action is needed.

The Fading Impact of the Vayupak Fund

The government’s rescue initiative designed to stabilize the market through large-scale investments in local firms, is now being questioned for its effectiveness. 

The outcome of this plan will serve as a litmus test for the government’s ability to steer market recovery.

When authorities announced fundraising for Vayupak in August 2024, the move was met with optimism. 

Goldman Sachs upgraded its outlook on Thai stocks, expecting the fund to attract foreign capital. But persistent political turmoil and weak corporate earnings continued to undermine confidence.

The market initially rallied, but the momentum soon faded. Government data revealed that household debt remained stubbornly high, while economic growth fell short of forecasts, making Thailand the slowest-growing economy in Southeast Asia in 2024. Consumption and manufacturing indicators also pointed to a slowdown.

By November, Goldman Sachs reversed its stance, downgrading Thai stocks and citing lackluster growth and high valuations.

At least 50% to 60% of the $4.5 billion fund has already been deployed, according to estimates from Macquarie Capital, yet the SET Index has dropped nearly 10% since the latest round of fundraising.

Foreign investors have pulled out $4.2 billion over the past 12 months—the highest outflow in Southeast Asia—driven by deep-seated pessimism about Thailand’s economic outlook. This flight of capital reflects a lack of faith in the government’s ability to address structural challenges beyond tourism, a sector already strained by declining visitor numbers from markets like China and rising safety concerns. High household debt, political uncertainties, and corporate scandals further erode sentiment, while external pressures like a stronger U.S. dollar and U.S. tariff policies under President Donald Trump exacerbate the emerging-market sell-off.

The SET50 Index, comprising the top 50 companies by market cap and liquidity, mirrors this broader decline. Heavyweights like PTT (energy), Airports of Thailand (AOT, tourism), and Bangkok Bank (BBL, finance) are likely feeling the pinch—energy faces oil price volatility, tourism grapples with regional competition, and banks contend with slowing loan growth. Despite attractive valuations (SET stocks often trade at 10–15x earnings) and dividend yields averaging 3–5%, these fundamentals haven’t stemmed the tide. The government’s latest moves—a $4.4 billion cash handout plan announced in March 2025 and calls for a weaker baht—aim to stimulate growth and support exports, but investors remain unconvinced.

Analysts point to a lack of clear catalysts. The Vayupak Fund’s impact has faded, and structural reforms under Prime Minister Paetongtarn Shinawatra’s administration—such as creating a business-friendly environment—have yet to materialize with force. Posts on X echo this gloom, with users noting the SET’s freefall and questioning the rescue plan’s efficacy. For the SET50, this suggests a tough road ahead: defensive stocks like banks and consumer staples may offer some resilience, but tourism and cyclical sectors could lag further without a significant turnaround in confidence or policy effectiveness. The faltering revival underscores a stark reality—state-led interventions alone may not sway markets amid such entrenched economic and global headwinds.