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What coup? Thailand stock exchange sees more gains

A military coup and a contracting economy haven't dampened the Thai stock exchange chief's optimism about foreign investors returning to the battered Southeast Asian country.

"After the current administrators announced an economic roadmap, everything [seems to have] come back to normal," Kesara Manchusree, president of the Stock Exchange of Thailand, told CNBC. "We will see more fundamental and more concrete measures develop our country."

Read More Thai army chief: Elections? Maybe after a year

Since seizing power on May 22, the military junta has been busy. In addition to cracking down on protesters and rounding up key political figures and journalists, the junta has detailed an economic plan which includes a two-month deadline to clear backed-up investment project applications and plans to restart government spending on infrastructure projects.

To be sure, while Kesara believes both the Thai economy and the companies listed on the exchange have been doing "quite well," gross domestic product (GDP) contracted 2.1 percent in the first quarter from the previous quarter, and many analysts expect a contraction in the second quarter as well.

Consumer spending also contracted for the past two quarters, the first time that's happened since the 1997 Asian financial crisis.

Thailand soldiers secure a bridge adjacent to the Bangkok skytrain on June 1 to prevent anti-coup protesters from gathering there.
Paula Bronstein | Getty Images
Thailand soldiers secure a bridge adjacent to the Bangkok skytrain on June 1 to prevent anti-coup protesters from gathering there.

But Kesara, who was in Singapore with Thai-listed companies for a roadshow to talk with foreign investors, expects forecasts for economic growth in the second half of the year will rise to around 2.5-3 percent.

Read MoreWhy Thailand shares are shaking off the coup

"The strong fundamentals of the Thai market and all the Thai-listed companies have been proven," she said. But while the SET index has rebounded more than 4 percent since the coup began, with a more than 18 percent gain so far this year, it's largely due to buying by domestic investors.

"The foreign investors seem to keep waiting," she added, although she noted the market saw net foreign inflows last week.

Read More Why Thailand's latest coup is different this time

Foreign investors bought a net $3.5 million worth of Thailand mutual funds and exchange traded funds (ETFs) last week, according to data from Jefferies. But it's a drop in the bucket compared with the net $1.04 billion foreign investors have sold so far this year, according to the data.

Amid political turmoil in 2013, foreign investors pulled around 194 billion baht, or $6 billion, from Thai shares, reversing the inflows from the previous four years.

Read More Thailand's growth outlook goes under the knife

But that hasn't deterred companies seeking a listing on the exchange. She noted Thailand's initial public offering (IPO) activity was among the highest in Asia last year, and this year's IPO pipeline is around $8 billion, with around $3.5 billion of that already listed.

The exchange is also sticking with its targets to double its volume and market capitalization by 2020, she said.

"We see this situation as short term," Kesara said of the country's political climate.

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

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