Daily trading value in October on the Stock Exchange of Thailand (SET) and Market for Alternative Investment fell 26.3% year-on-year to 47.2 billion baht, attributed to concerns over the Middle East war and Thailand's economic prospects, says the bourse.
For the first 10 months this year, average daily trading value for both markets was 55.3 billion baht a day, down 31% on concerns about the US bond yield rising, uncertainties about the war between Israel and Hamas, and the oil price rising if inflation remained at a high rate, according to the SET.
Foreign investors were net sellers for the ninth straight month in October with a net of 15.7 billion baht.
For the first 10 months this year, they sold 171 billion baht worth of Thai shares.
Foreigners' trading ratio was the highest among investor types for 18 consecutive months, said Soraphol Tulayasathien, senior executive vice-president of the SET.
"Investors were spooked by the US bond yield spikes, which narrowed the return spread between stocks and government bonds since September," he said.
Meanwhile, the International Monetary Fund (IMF) slashed its forecast for Thai economic growth this year to 2.7% from a previous estimate of 3.4%.
The revision was attributed to lower than expected second-quarter GDP growth, caused by the slow pace of the tourism rebound and export growth. However, the IMF remains optimistic that Thailand's economic growth is poised to gain speed, said Mr Soraphol.
"There are concerns that the Israel-Hamas war, which could be prolonged and intensify into a regional conflict, could lead to rising oil prices and inflation, resulting in volatility in asset investments globally," he said.
However, the impact on the Thai stock market is expected to be limited if the war remains contained in Israel and lasts for a short period of time, said Mr Soraphol.
At the end of last month, the SET index fell 6.1% from the previous month to close at 1,381.83 points, in line with other regional peers, down 17.2% from the end of 2022.
The Thai stock exchange's forward price-to-earnings (P/E) ratio was 15.9 times at the end of October, above the average of Asian bourses at 12.3 times.
The historical P/E ratio of the SET is 21.1 times, exceeding the average of Asian bourses at 13.2 times, while the dividend yield ratio is 3.29%, below the Asian average of 3.53%.