Upgrading the market amid volatile foreign capital

Fluctuates due to many factors

Despite some positive net buying sessions, with strong bluechip selling pressure, foreign investors still net sold nearly VND1,700 billion in the past 4 trading sessions (April 8-11). Statistics on the HoSE and HNX floors show that foreign investors net sold 2 sessions and net bought 2 sessions. Specifically, on the HoSE floor, this group net sold 35.73 million units, with a total net selling value of VND1,332.1 billion. On the HNX floor, foreign investors net sold 2.44 million units, with a total net selling value of VND125.53 billion, up more than 5.5 times in volume and 130.5% in value compared to the previous week.

Normally, during a positive period for upgrading (like Vietnam at present), foreign investors often net pour into the market. However, since the beginning of the year, foreign investors have been net sellers quite strongly. Dr. Phan Phuong Nam, Ho Chi Minh City University of Law, explained that the US Federal Reserve (Fed)'s slower-than-expected interest rate cut has caused capital flows to flow back to safer markets, instead of into frontier and emerging markets. Potential instability from the risk of a global trade war during the term of US President Donald Trump has also contributed to increasing cautious sentiment.

This has caused many international investment funds to shrink and reduce capital allocation to frontier and emerging markets - which are considered sensitive to geopolitical fluctuations. Along with that, the rate of return from investment activities in the Vietnamese stock market is not as attractive as some other developed markets. In addition, the increasing price of the USD also causes these organizations to incur additional cost compensation. This has caused many investment funds to shift their investment to markets with higher rates of return.

Foreign capital inflow and outflow is a normal development of the global financial market.

Upgrading is upgrading the quality of the market.

Some experts are concerned that these developments will affect the process of upgrading the Vietnamese stock market in the coming months. Mr. Ha Duy Tung - Vice Chairman of the State Securities Commission informed that the market developments in recent times have been affected by the new tax policy of the Donald Trump administration and the regulatory response in other countries. However, there has not been any unusual net selling by foreign investors in recent times. According to the most recent statistics, the total net selling value only accounts for about 1.9% of the foreign portfolio - considered a relatively small proportion.

Mr. Tung also said that recently, the Ministry of Finance has implemented the completion of the legal framework and policy mechanisms to meet the criteria for upgrading the market of international organizations. In the coming time, the Ministry of Finance will continue to handle technical issues, including dialogue, investment promotion, etc. so that foreign organizations continue to evaluate positively, aiming to upgrade the market this year.

However, to achieve the upgrading goal, it is necessary not only to meet technical criteria but also to improve the actual experience of investors in the market. Therefore, the Ministry of Finance and the State Securities Commission are continuing to promote reforms to create the best conditions for foreign investors.

Upgrading the market is a long-term process, requiring continuous improvement in market quality, information transparency and access to capital. Achieving a new market status is not only a technical goal, but also reflects the sustainable development of the Vietnamese stock market. “Upgrading the market will be an important milestone, marking a qualitative change in the stock market. This is not only the task of the management agency, but also requires the cooperation of financial institutions, listed enterprises and investors to build a stable, transparent and sustainably developing market,” affirmed Deputy Minister of Finance Nguyen Duc Chi.

Sharing about the trend of foreign capital flows in the Vietnamese stock market in recent times, Mr. Chi informed that foreign capital inflows and outflows are normal developments in the global financial market. In the first quarter of 2025, capital outflows were greater than capital inflows, but this is not a negative signal, but should be considered in a broader context. Factors such as investment strategies, policies of each fund or market psychology can all affect this trend.

Source: https://thoibaonganhang.vn/nang-hang-thi-truong-trong-boi-canh-von-ngoai-bien-dong-162856.html