Stocks continue to rise despite strong foreign selling?

VN-Index sets a new record for index growth after 2 years amid strong net selling by foreign investors since the beginning of the year. The Vietnamese stock market has received many positive signals,

Stock market sets new record

Recently, the market has witnessed a series of positive fluctuations, an upward trend after a decline in April. Typically, the VN-Index left the old peak at 1,290 points, reaching 1,300 points in yesterday's session (June 12). This is the highest point in the past 2 years. The upward trend continued to be maintained in this morning's session (June 13).

VN-Index hits new peak after 2 years (Photo: SSI iBoard)

This shows that domestic investors' sentiment has been somewhat strengthened, reducing worries in the context of foreign investors' strong net selling.

Since the beginning of the year, foreign investors have net sold VND40,000 billion, equivalent to USD1.6 billion, on the HOSE floor. The market also witnessed a sell-off earlier in 2021, resulting in a net selling value exceeding VND58,000 billion, setting a record for the strongest sell-off in the Vietnamese stock market.

VHM has lost 11% of its value since the beginning of the year due to profit-taking pressure from foreign investors (Photo: SSI iBoard)

Strong net selling by foreign investors since the beginning of the year, recorded in real estate stocks Vinhomes (VHM, HOSE), valued at around VND11,000 billion, of which more than VND8,000 billion worth of shares were net sold by matching orders. Therefore, the value of VHM shares since the beginning of the year has decreased by more than 12%.

In addition, technology stock FPT (FPT, HOSE) was also unexpectedly targeted by foreign investors for selling. However, FPT's market price still maintained a strong upward momentum, continuously setting new records.

What do experts say about VN-Index increasing while foreign investors are dumping?

Experts believe that the actions of foreign investors are coming from the difference in interest rate environment, monetary policy, high exchange rate, etc. That creates the restructuring of global capital flows by foreign financial investors. This phenomenon occurs not only in Vietnam but also in many other markets.

However, while foreign investors are selling heavily, the VN-Index is still in a positive trend. Mr. Minh Chau, senior investment consultant, Mirae Asset Securities, explained: Domestic demand is being absorbed very well, playing an important role in helping the market go up and is less affected by foreign investors.

The developments of yesterday's session (June 12, 2024) seem to be a testament to the positive sentiment of domestic investors in the face of concerns about strong net selling pressure from foreign investors. This comes from the following factors: Vietnam's economy is in the recovery stage thanks to government policies such as: reducing VAT, car registration fees, increasing public investment, lowering interest rates...; Focusing all resources on handling the "blood clot" of bonds with circulars changing credit extension, land law... When this is gradually resolved, it will certainly spread to the entire economy.

To invest reasonably and effectively, experts recommend that investors pay attention to the core points below to determine the market potential in the medium and long term, specifically: domestic macro context, overall market profits and low interest rate cycles.

At the same time, expert Minh Chau said that the strong net selling status of foreign investors will have a short-term impact, but will not affect the medium- and long-term prospects of the Vietnamese stock market. Specifically, foreign capital flows are mainly from Global Funds, and they are also selling very strongly in markets such as Thailand, Malaysia, the Philippines... a common trend in emerging and frontier markets. This is a very normal capital reallocation of these funds.

Recent market developments show that Vietnamese stocks are considered to be in a period worth investing in, and foreign investors' selling pressure is no longer a big concern. Individual cash flow is the main subject, so the fluctuations in each industry group will be quite fast, but will not affect the general trend.

Source: https://phunuvietnam.vn/chung-khoan-tang-lien-tuc-bat-chap-khoi-ngoai-ban-rong-16-ty-usd-20240613110602323.htm