Thai stocks fell to a three-week low on Wednesday, led by a heavy fall of shares in satellite operator Shin Satellite PCL after the firm announced a share sale plan that triggered worries about the dilution effect.
Shares in Shin Sat, Asia's second largest satellite operator, fell 14 percent to 32.5 baht, sending the communication sector index down 3.14 percent.
Analysts said the company's plan to raise its registered capital by one billion baht ($25.67 million) by issuing new shares to the public dampened sentiment not only in Shin Sat shares, but the market as a whole.
"Investors were concerned that the market will be even more sluggish if funds shift to invest in Shin Sat's new shares," said Aroonrat Jivankul of Siam City Securities.
The benchmark Stock Exchange of Thailand (SET) composite index closed down 15.63 points, or 2.17 percent, at 704.65 points, its lowest close since February 3.
The big-cap SET 50 index fell 2.53 percent at 46.56 points.
Analysts said an early technical rebound was short lived due to lack of follow-through buying in thin trade, with turnover at only 19 billion baht ($488 million), although up from 14.1 billion baht on Tuesday.
They attributed the market sluggishness to bearish foreign investors despite expectations that anti-speculation measures, due to come into effect on March 8, would help strengthen their confidence.
"Speculation was very thin due to the measures, while fresh funds are waiting as there is no positive news to attract them," said Wiriya Lappromratana of Kiatnakin Securities.
Analysts said they expected a weak market this week with resistance on Thursday at 715-720 points and support at 700 points.
Investors sold shares in Banpu, Electricity Generating (EGCOMP) and Ratchaburi Electricity Generating Holding which resumed trading on Wednesday after they clarified a share swap deal.
Banpu fell 7.6 percent to 134 baht, EGCOMP slid 5.1 percent to 74 baht and Ratchaburi slipped 4.9 percent to 39 baht.
The energy sector index fell 2.28 percent.
State-owned Electricity Generating Authority of Thailand (EGAT) said on Monday it would renegotiate the sale of a 25 percent stake in EGCOMP to Banpu in return for a 15 percent stake in Ratchaburi. But Banpu said on Wednesday the deal had not been cancelled.