Approximately 2 billion USD worth of Vietnamese stocks were net sold by foreign investors on HOSE in the first half of 2024 alone.
With net sales of hundreds of billions, even up to more than a thousand billion VND per session, it is not surprising that the net selling value of foreign investors on the Vietnamese stock market continuously reaches new milestones. According to statistics, foreign investors have net sold more than 50,000 billion VND (approximately 2 billion USD) on the HoSE since the beginning of 2024.
It is not impossible that new record milestones will soon be set when foreign investors have not shown any signs of stopping selling. Currently, the record net selling year in history was recorded in 2021 with a figure of over 58,000 billion VND.
The strongest net selling volume since the beginning of the year was recorded at Vinhomes real estate stock - VHM with a value of approximately VND12,000 billion, of which about VND9,000 billion worth of shares were net sold by matching orders. Next on the list of net selling by foreign investors was FUEVFVND fund certificate with a net selling value of more than VND7,200 billion. Two other bluechip stocks, VNM and FPT, were also net sold for more than VND5,600 billion and more than VND5,100 billion, respectively.
Similarly, strong net selling value of foreign investors was also recorded in a series of other stocks such as VRE (~3,300 billion), MSN (~3,200 billion), VND (~2,300 billion),...
On the other hand, foreign investors have aggressively bought Mobile World – MWG with more than 2,000 billion VND since the beginning of 2024. However, compared to the beginning of the month, they have sold a little. In addition, NLG and MSB were also net bought well with values of approximately 810 billion and 700 billion VND, respectively.
Currently, foreign transactions no longer have as much influence on the market as before, and in some periods, they are even somewhat overshadowed by domestic cash flows. However, the continuous net selling of foreign investors will certainly affect the sentiment of domestic investors.
Looking back, the periods of strong net foreign buying were mainly of a temporary nature, taking advantage of the bottom when valuations dropped after deep market falls. This cash flow came in large quantities but also withdrew quickly, causing Vietnamese stocks to lack the motivation for a sustainable “uptrend”.
It should be said that the difference in interest rate environment, monetary policy, high exchange rate... has significantly impacted the actions of foreign investors in recent times. This has caused capital restructuring activities globally, weaker growth markets, depreciated currencies or frontier markets will be strongly withdrawn to allocate capital to more efficient markets. Not only Vietnam, but also regional markets such as Thailand and China have been clearly affected.
In particular, the net selling trend also shows a certain caution of foreign investors in Vietnamese stocks. The story of upgrading the stock market to attract foreign capital is still just an expectation. In fact, the market has been stuck in the old area for many years, the VN-Index is "rolling" around 1,200 - 1,300 points, and capitalization has not been able to completely break out. In addition, some individual factors can also have a negative impact on foreign investors such as the difference in proportion between industry groups on the floor, the lack of "good" products such as manufacturing, industry, technology, medical, health care, etc.
In a recent report, SSI Research said that risks related to interest rates and exchange rates are the biggest factors affecting foreign capital flows into Vietnam at the present stage. However, the report pointed out a positive point, which is the expectation that the second draft of the circular allowing securities companies to implement payment support for institutional investors will be announced soon.
The analysis team maintains a cautious view on capital flows into Vietnam's ETFs, but assesses that the intensity of net withdrawals will be more limited. Positive signals may begin to appear when the macro environment (exchange rates and interest rates) is more stable.
Source: CafeF
