Circular 68 improves market sentiment and investor purchasing power

Director of Analysis Department of VNDIRECT Securities Joint Stock Company - Mr. Barry Weisblatt David assessed that the direct impact from Circular 68 itself will be quite small in scope. However, indirectly, the new regulation improves the ability to upgrade the market.

Director of Analysis Department of VNDIRECT Securities Joint Stock Company - Mr. Barry Weisblatt David assessed that the direct impact from Circular 68 itself will be quite small in scope. However, indirectly, the new regulation improves the ability to upgrade the market.

Foreign investors have not ended their net selling streak.

In the first trading session since Circular No. 68/2024/TT-BTC officially took effect, foreign investors' net selling momentum has not stopped. This trend has been maintained since October 11. Previously, foreign investors net sold more than VND 11,000 billion in October 2024 alone, the highest in the past 4 months.

Yesterday, foreign investors net sold 673 billion VND on HoSE and nearly 685 billion VND on the three exchanges. Large-cap stocks were the focus of net selling. MSN was the most net sold by foreign investors with 246 billion VND. VHM was also net sold over 200 billion VND. FPT and VCB were net sold 101 billion VND and 48 billion VND respectively. On the other hand, STB shares were the most disbursed and bought, but only reached a net buying value of 84 billion VND. MWG was behind with a net buying value of 63 billion VND. Following were MWG (63 billion VND), VPB (33 billion VND).

However, the first trading session of the week was somewhat affected when many investors chose to observe important international events that will take place this week, including the US election, the monetary policy meeting of the US Federal Reserve (Fed)... All three indexes simultaneously closed in red.

Wait for the impact to sink in

Assessing the impact of Circular No. 68/2024/TT-BTC, Mr. Barry Weisblatt David, Director of Analysis Department of VNDIRECT Securities Joint Stock Company, said that this is a very important circular because it demonstrates the Government's commitment to attracting foreign investment capital into the Vietnamese stock market.

Mr. Barry Weisblatt David hopes to be part of the trend of turning Vietnam into an attractive investment destination.

According to him, Circular No. 68/2024/TT-BTC will make some active fund managers increase their allocation to Vietnam as investing becomes more cost-effective. However, this scope is quite small because it does not affect the allocation from funds that have invested 100% in Vietnam such as PYN Elite Fund, Dragon Capital or VinaCapital, although their profits will increase slightly. The Circular will mainly affect regional funds or funds specializing in global frontier and emerging markets with an interest in Vietnam.

“The bigger impact is the indirect impact of the increased likelihood that a market rating agency like FTSE will announce an upgrade to emerging market status. This announcement will positively improve market sentiment and individual investor purchasing power. In addition, foreign ETFs that simulate the Vietnamese market may increase their assets under management as investors in foreign markets expect an upgrade to emerging market status. This could be an important event and help increase stock prices in the first quarter of 2025,” emphasized the Director of Analysis at VNDIRECT.

When Vietnam is officially upgraded by FTSE in September 2025 and Vietnamese companies are included in emerging market indices, Mr. Barry Weisblatt David said that Vietnam can expect large capital flows from emerging market ETFs, about 500 million - under 1 billion USD, according to reasonable estimates. Beneficiaries may include those currently dominating the FTSE FM index, including HPG, VHM, VCB, VIC and VNM.

Mr. Tran Hoang Son, VPBank Securities Market Strategy Director, also assessed Circular 68 as one of the important circulars that helps Vietnam meet the criteria for upgrading. For foreign institutional investors who have connections with securities companies, the new regulation is good news because they do not need to keep money in their accounts but can buy in advance when they discover opportunities and pay later. Vietnam is gradually meeting the strict standards for upgrading in the coming time.

However, Mr. Son also emphasized that there are still criteria that have not been met and expects these factors to be improved in the coming time to support the goal of upgrading the market.

FTSE Russel to increase discussions and work with stakeholders in Vietnam

After the Circular was issued, the latest update from FTSE also highly appreciated the efforts of the Vietnamese management agency in allowing foreign institutional investors to buy and only have to pay on T+2. At the working session on the afternoon of November 4 between the State Securities Commission and representatives of FTSE Russell and Morgan Stanley.

Mr. Young Lee, Managing Director of Asia Equities Business at Morgan Stanley, said the new regulations in Circular No. 68/2024/TT-BTC have helped the Vietnamese stock market to be more in line with the mandatory requirements of FTSE Russell.

Morgan Stanley representative assessed that removing the requirement of having enough money when placing an order is an important requirement from investors and it takes a lot of time to amend the mechanism and policies. Vietnam has made important changes to this criterion in a short time.

Ms. Wanming Du, Head of Index Policy, FTSE Russell affirmed that FTSE Russell will increase exchanges and work with relevant parties in Vietnam to support foreign investors' trading activities in Vietnam, as well as share information and trading methods of FTSE customers in emerging markets.

Source: https://baodautu.vn/thong-tu-68-cai-thien-tam-ly-thi-truong-va-luc-mua-cua-nha-dau-tu-d229181.html