(TBTCO) – Calculated in the first 11 months of 2023, the net selling value of foreign investors on the Vietnamese stock market is low compared to other markets. Currently, the proportion of assets allocated to stock funds is at a level equivalent to the 5-year average (about 55%), showing that cash flow into stocks still has the potential to surge, especially from restructuring. structure from monetary funds, if the trend of interest rate cuts from developed countries, especially the US, becomes clearer and stronger. At that time, emerging markets (and Vietnam) will certainly benefit somewhat.
Around the net selling situation of foreign investors in the domestic stock market, TBTCVN reporter had an interview with Ms. Hoang Viet Phuong – Director of Center for Analysis and Investment Consulting (SSI Research), Joint Stock Company. SSI Securities section.
|Ms. Hoang Viet Phuong – Director of Investment Analysis and Consulting Center (SSI Research), SSI Securities Joint Stock Company.
PV: Foreign investors have been net sellers quite strongly on the stock market since the beginning of the year until now. Can you give more details about this development? What about other regional and frontier markets, ma’am?
Ms. Hoang Viet Phuong: The net selling value of foreign investors in the Vietnamese market is low compared to other markets if calculated for the first 11 months of 2023. Specifically, in the Southeast Asia region, the net withdrawal trend is prominent in the Thai market. up to 5.4 billion USD compared to net withdrawals in Vietnam (-554 million USD), Indonesia (-877 million USD), Philippines (-855 million USD). Global investment cash flow in 2023 is strong in large markets such as the US and Japan and withdraws strongly in the Chinese market.
With a net selling value of nearly 13 trillion VND, in detail, foreign investors’ net selling is only locally concentrated in 3 codes: EIB (-5 trillion VND), VPB (-3 trillion VND) and MWG (-3.2 trillion VND). trillion). Meanwhile, on the contrary, foreign investors strongly net bought nearly 900 billion VND in the basic resources group in November and accumulated a net purchase of more than 6 trillion VND in this group since the beginning of the year. Foreign investors also continued to net buy other groups such as chemicals, construction materials and oil and gas in the last 2 months.
PV: In your opinion, what is the main reason why foreign investors sell so strongly?
|Foreign investors’ portfolio restructuring activities can create space for mid-term expectations when investment cash flows into the Vietnamese market benefit from the trend of shifting to developing markets in the context of investment. The trend of interest rate cuts is clearer and stronger.
Ms. Hoang Viet Phuong: In the Vietnamese market, foreign investors’ strong net selling came from the reversal of net withdrawals from ETF funds and the general net withdrawal trend of multinational investment funds withdrawing from emerging markets, while the fund group proactively In Vietnam, there has been only a slight net withdrawal in the past 4 months.
The reason comes from the difference in real interest rates between the US and the remaining countries, in addition to Vietnam’s monetary policy diverging from the US’s monetary policy and partly from profit-taking activities after the net buying period. strongly in November 2022, December 2022 and January 2023 with a total value of up to 32.5 trillion VND.
It can also be seen that foreign investors’ net selling from the beginning of the year until now has focused on certain stock codes and also partly reflects portfolio restructuring activities.
|The proportion of foreign transactions is not large, so it only affects the psychology of individual investors. Illustration.
PV: In fact, foreign transactions no longer have too much impact on cash flow in the market. So, in your opinion, how will such net selling by foreign investors affect the stock market in general?
Ms. Hoang Viet Phuong: From the beginning of the second quarter of 2023 until now, the trading proportion of foreign investors has remained stable around the 8% threshold and it can be seen that the impact is not large on the market in terms of scores but only has a psychological impact on investors. Domestic individual investment causes the market to move cautiously for a long time.
From another perspective, foreign investors’ portfolio restructuring activities can create space for mid-term expectations when cash flow invested in the Vietnamese market benefits from the trend of shifting to the market. is growing in the context of a clearer and stronger trend of interest rate cuts.
PV: Many opinions and many foreign investors through contact say that Vietnam’s macro economy is still a bright spot, investment opportunities in Vietnam’s stock market still have potential… What do you think about foreign investors returning? When USD interest rates decrease and the exchange rate becomes less tense? What are the factors that can help Vietnam’s stock market attract foreign capital in the near future?
Ms. Hoang Viet Phuong: A clear trend of foreign transactions, not only in Vietnam but in developing countries in general since mid-2023, is net withdrawal, when cash flows return to the US market (including stocks, bonds or money funds).
|The bright spot of Vietnam’s stock market will come from a stable macro environment (exchange rates and inflation are controlled), favorable monetary policy (interest rates are at historically low levels), and consumer spending is under control. Domestic use still has great potential to develop when the population structure is still in the golden period and FDI capital flows are positive thanks to the shifting trend and advantages from the China +1 story.
Regarding expectations in the near future, the current proportion of assets allocated to stock funds is at a level equivalent to the 5-year average (about 55%), showing that cash flow into stocks is still likely to increase. destruction, especially from restructuring from monetary funds (net inflow of up to 1.3 trillion USD in 2023) if the trend of interest rate cuts from developed countries, especially the US, is clear and strong. stronger. At that time, emerging markets (and Vietnam) will certainly benefit somewhat.
The bright spot of Vietnam’s stock market will come from a stable macro environment (exchange rates and inflation are controlled), favorable monetary policy (interest rates are at historically low levels), and consumer spending is under control. Domestic use still has great potential to develop when the population structure is still in the golden period and FDI capital flows are positive thanks to the shifting trend and advantages from the China +1 story.
However, in order to be able to attract foreign fund capital flows in a more long-term way, in addition to being upgraded from frontier market to emerging market, it is possible to activate an amount of ETF Fund capital and proactively, market Securities should develop more extensively, including: Boosting the number of businesses listed on the stock exchange to diversify listed industries and from there, businesses will also reduce their dependence on bank credit; increase the participation rate of institutional investors (including pension funds) to help make the market more stable.
PV: Thank you!