Foreign funds usually make net purchases in January each year because this is the time for restructuring portfolios of global investment funds. But in January 2025, foreign investors net sold 144 million shares in the Vietnamese market.
Foreign investors have not stopped withdrawing money from the Vietnamese stock market - Photo: QUANG DINH
Since the beginning of the year, foreign investors have net sold more than 13,000 billion VND in the stock market, after a record withdrawal in 2024. Experts have analyzed and forecasted this trend.
Monitor factors to expect foreign reversal
* Analyst Nien Nguyen - Shinhan Securities Vietnam:
- Funds are gradually having a significant impact on the liquidity of the entire market, so the continuous net selling of foreign investors affects the growth momentum of the general market.
Normally, foreign funds will net buy in January every year because this is the time for restructuring the portfolio of global investment funds, but last January, foreign investors net sold 144 million shares, equivalent to 6,500 billion VND on HoSE.
In addition, investment funds tend to invest in large-cap stocks, especially foreign funds. Because the capitalization of these stocks is large, the increase or decrease of these stocks significantly affects the increase or decrease of the general market.
For example, FPT was net sold 6,000 billion VND when its stock price increased sharply in 2024. Meanwhile, this stock has always had full foreign room for many years before 2024.
The trend of foreign investors net selling and focusing on selling large stocks will continue at least in the first quarter of 2025 as the Vietnamese market awaits supportive information from the market upgrade so that foreign capital can return.
In addition to the upgrade, factors to watch for in anticipation of a reversal in foreign capital flows include global interest rates (Fed and 10-year US government bonds) falling or stabilizing in new price zones. When interest rates stabilize, the exchange rate will also stabilize.
Foreign ownership ratio drops to lowest level since 2015
* Ms. Hoang Viet Phuong - Director of SSI Securities Investment Analysis and Consulting Center:
- ETF funds maintained a net withdrawal status in the first month of 2025 with a total value of -616 billion VND, this is also the 15th consecutive month that ETF funds have net withdrawn from Vietnam.
In 2025, capital flows from investment funds into the Vietnamese market will still be affected by many conflicting factors.
Capital flows will be limited by expectations of a slow pace of Fed rate cuts and exchange rate pressures, unpredictable policies under President Trump or a potential economic recession, or the limited number of stocks in cash-attracting industries such as technology.
However, foreign ownership in the Vietnamese market has fallen to its lowest level since 2015, which may limit net withdrawals.
Expectations of foreign investors returning to the Vietnamese market in 2025 will come from the story of FTSE Russell's upgrade to emerging market status.
In addition, stepping-stone policies such as the implementation of the KRX trading system, the application of the amended Securities Law and the amended Decree 155 will create a premise for the development of the capital market in the medium and long term.
Foreign investors sell, investors "balance" the market
* SGI Capital Analysis Team:
- The Vietnamese stock market is halfway through the first quarter of 2025 with many intertwined factors. The positive point throughout is that the fourth quarter financial report continues to show stable growth on a more reasonable valuation basis.
The government’s determination to achieve 8% growth this year through boosting infrastructure investment and credit, along with the prospect of an upgrade to emerging market status by the FTSE, are big enough expectations to boost confidence and keep cash flowing despite rising external risks.
However, trading and liquidity continue to be sluggish, showing that there has been no new cash flow entering the market recently.
Foreign investors continued to net sell VND11,000 billion since the beginning of 2025, continuing to put pressure on overall purchasing power when domestic investors' cash balance decreased by more than 30% in 3 consecutive quarters to VND73,000 billion at the end of Q4-2024.
Historically, sharp declines in cash balances have been accompanied by sell-offs and sharp declines, but this time reasonable valuations and domestic investor confidence are helping the market hold up.
Source: https://tuoitre.vn/dong-thai-dang-chu-y-tu-khoi-ngoai-voi-chung-khoan-viet-ngay-dau-nam-20250217120439105.htm
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