When the Stock Exchange of Thailand (SET) rebounded by 1.5% on Oct 11, with foreign investors buying nearly 3 billion baht worth of stocks, veteran investor Watchara Kaewsawang was in no rush to return to the market.
"I think this was a short-term technical rebound after the index fell for several days," said the 50-year-old investor who has traded Thai stocks since 1992.
He said he has traded a lot less this year than in the past.
Like many investors, Mr Watchara reported a portfolio decline of 8% this year as the SET has been the worst performer among Asian bourses. In the first nine months of 2023, the SET index fell by 11.8% year-on-year, and dipped 6% year-on-year in September alone.
Foreign investors were net sellers for the eighth straight month in September with a net outflow of 22.4 billion baht.
"Almost everything I expected would boost the stock market has flopped. This was an election year, which normally leads to stock market rallies, but the index actually declined notably after the election because of an extended political vacuum," he told the Bangkok Post.
Some investors were encouraged after the Move Forward Party, which won the most votes in the election, failed to form a new government as the party's policies were interpreted as being unfriendly to the bourse.
The stock market briefly rallied after a Pheu Thai Party coalition government took office in August and announced its economic policies, before falling sharply again.
"The stock market dip this year was partly the result of Thai interest rates being much lower than in other countries, leading to a capital outflow and the baht's depreciation," said Mr Watchara.
"We cannot deny uncertainty and a lack of clarity regarding government policies also affected investor confidence, resulting in the stock market contraction."
Well-known value investor Nives Hemvachirakorn noted the Thai index dropped from the end of August to Oct 7 by 8% in total, partly attributed to a 4.4% fall in the S&P 500 index and a 4.3% decrease in the Nasdaq over the same period.
The declines were caused by interest rate hikes by the US Federal Reserve to 5.25-5.50%, with the possibility of further increases.
"The difference between American and Thai bourses is the S&P 500 and Nasdaq are in positive territory for the year, gaining 12.7% and 29.3%, respectively," said Mr Nives.
"The SET index has contracted 13.8% during the period and is at nearly the same level as a decade ago, at 1,438 points."
In addition to the interest rate hikes, he pointed to other factors weighing on the bourse including Thailand's low economic growth of 3% or less this year, the profits of SET-listed companies and foreign net outflows.
Foreign investors have sold 160 billion baht worth of Thai stocks so far this year.
"Over the past 10 years, foreign investors divested nearly 1 trillion baht worth of Thai stocks, which explains why the SET index is at roughly the same level," said Mr Nives.
Padoempob Songkroh, vice-president of Bualuang Securities, said the uptick in the SET index last Wednesday was influenced by an easing of global bond yields, which led to a return of foreign inflows to both the Thai equity and bond markets.
Some Fed officials also hinted the central bank's rate hikes have possibly ended.
"I think the Thai index will stay in a sideways range, and the forecast by some analysts of a fourth-quarter recovery remains hazy," said Mr Padoempob.
"Prospects for the first quarter of 2024 are not so bright."
Kavee Chukitkasem, head of research and content at PI Securities, is more bullish, noting the index is already on the road to recovery.
The brokerage forecasts the SET index to bounce back to 1,500-1,550 points by year-end.
"There is a feeling the Fed might not increase rates for the remainder of the year," said Mr Kavee.