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Worse, they view political instability as one key reason, aside from inflation, for selling.

HSBC's Asia-Pacific equity strategy recently downgraded the market from "overweight" to "underweight".

Despite the attractive environment, including lowest price-to-earnings ratio, it said political risks led the bank to "close its position" here.

"But we do not think this [attractive market environment] will be enough to offset the political risks, and so we close our position in this market - which anyway is now only 2 per cent of MSCI Asia ex-Japan," HSBC said in its report.

"But we believe Thailand's serial political instability is becoming too entrenched," HSBC said.

Prime Minister Samak Sundaravej is already under attack from all sides, with middle-class demonstrators in Bangkok seemingly happy to trigger another coup.

This instability has continued for three years, since former prime minister Thaksin Shinawatra's rule started to be questioned.

Fundamental fissures in society and politics - between urbanites and rural dwellers, the Army and the populace - need to be resolved before the impasse ends.

In the meantime, with the political outlook likely to remain uncertain for the rest of the year at least, foreign investment decisions are likely to be further delayed.