Since the session on June 4, foreign funds have not had any net withdrawal sessions, all are capital withdrawals mixed with a few sessions without trading.
The withdrawal of capital from the foreign fund Fubon FTSE Vietnam ETF has lasted for many months. Since the session on June 4, this foreign fund from Taiwan (China) has not had any net withdrawal sessions, mainly capital withdrawals. The amount of up to 107 million USD, equivalent to 2,700 billion VND of Vietnamese stocks, was net sold in less than 3 months.
The strong withdrawal caused the size of this ETF to decrease significantly. At the end of August 22, the size of Fubon FTSE Vietnam ETF reached 21.7 billion NTD (about 676 million USD, equivalent to 16,900 billion VND), down more than 3,300 billion compared to the beginning of 2024. However, Fubon is still the largest ETF fund on the Vietnamese stock market.
The fund uses the FTSE Vietnam 30 Index as its reference index, in which HPG is the stock with the largest proportion in the portfolio with a proportion of 9.7% (63.5 million shares), followed by VNM (8.97%), VCB (8.8%), VHM (8.7%), VIC (8.5%)...
Since the beginning of 2024, the cash flow into this ETF has recorded a net withdrawal of up to 167 million USD, equivalent to about 4,200 billion VND. Notably, the strong capital withdrawal momentum at Fubon ETF occurred even though the fund was raising additional capital for the 6th round.
Previously in June, the Financial Supervisory and Regulatory Commission officially approved the 6th round of additional capital mobilization of Fubon FTSE Vietnam ETF at 5 billion TWD (~154 million USD). Thus, Fubon ETF is able to invest up to 4,000 billion VND to buy Vietnamese stocks.
The net withdrawal of Fubon ETF is in line with the general movements of foreign investors on the Vietnamese stock market. Foreign investors have not shown any signs of disbursement yet. In the first 8 months of the year, foreign investors recorded a net sale of nearly VND68,200 billion on HoSE - setting a record year of net sale never seen before in history.
The foreign investors selling stocks is likely due to concerns about business results being affected by the difficulties of the general economy, the market valuation has increased significantly, and it may also come from the factor that the stocks on the Vietnamese stock market are not suitable for the "taste" of foreign investors. The escalating exchange rate also partly affects the investment flow out of emerging and frontier markets like Vietnam.
However, the return of net purchases of Vietnamese stocks in recent sessions is a positive sign. According to Mr. Bui Van Huy, foreign investors recorded positive net purchases during the weeks when the VN-Index bottomed out. Mr. Huy expects the FED to cut interest rates to help narrow the gap between domestic and international interest rates, thereby reducing exchange rate pressure.
According to experts, it is difficult to determine whether foreign capital flows will return sustainably because the market will need new stories, but it can be affirmed that the peak of foreign capital withdrawal has likely passed.
Source: CafeF
