Foreign capital flows show signs of reversal to net buying in Vietnam's stock market

After three consecutive years of net selling, foreign investor flows into Vietnam’s stock market are showing clear signs of a turnaround from late 2025 and into the first trading sessions of 2026, analysts said.

Market strategists expect two key drivers – an upcoming market upgrade (scheduled for September this year) and easing foreign exchange pressures – to underpin a more sustained return of foreign capital.

Foreign investors turned net buyers in the final month of 2025 and have maintained net inflows into early 2026. Data showed that foreign investors sold heavily between August and October 2025, with total net outflows of VND81 trillion dong ($3.08 billion) across all three exchanges (HoSE, HXN, UPCom), or an average of VND27 trillion ($1.03 billion) per month.

Net selling eased to VND8.23 trillion in November before reversing to net buying of nearly VND1.7 trillion ($64.7 million) in December.

In the first six trading sessions of 2026, foreign investors recorded net inflows of nearly VND1.52 trillion ($57.75 million), including four consecutive net-buying sessions. Daily net buying has steadily improved from around VND500 billion to more than VND1 trillion ($38.07 million) in the session on Monday.

Foreign inflows were concentrated in banking stocks, with VCB attracting nearly ND1.15 trillion ($43.7 million) in net buying, followed by MBB with VND902 billion and VPB with VND577 billion since the start of January.

The return of foreign capital has been one of the key drivers pushing the VN-Index to successive record highs. Since the beginning of 2026, the benchmark index has risen by nearly 100 points, supported by sector rotation across the market.

Foreign investors were net sellers on Vietnam’s stock market for three straight years from 2023 to 2025. Analysts expect flows to reverse more decisively this year, supported by Vietnam’s stock market status upgrade and a positive interest rate differential between the Vietnamese dong and the U.S. dollar.

In October 2025, FTSE Russell announced Vietnam’s upgrade from frontier to secondarry emerging market status, with the change set to take effect on September 21, 2026. A provisional review is scheduled for March 2026, a key milestone at which FTSE Russell will reassess system readiness and market accessibility, particularly progress in enabling access through global brokers.

Vietnam’s removal from the Frontier index is expected to be implemented in a single tranche in September 2026, while inclusion in the Emerging Markets index may be phased in over multiple tranches to manage liquidity.

Meanwhile, currency pressures are expected to ease in 2026. KB Securities Vietnam (KBSV) forecasts the USD/VND exchange rate to rise by 2.5-3% this year, below the 3.5% increase recorded in 2025.

Factors supporting the Vietnamese dong include a weaker U.S. dollar index as the Federal Reserve is expected to cut interest rates twice more, while other major central banks such as those in Japan, Europe and Britain have shifted to tightening or signalled the end of easing cycles.

In addition, U.S. dollar interest rates have fallen below dong rates after multiple cuts, reducing carry trade incentives. Foreign currency supply is also expected to improve, driven by FDI inflows, a recovery in exports as tariff-related uncertainties ease, and stronger foreign capital attraction linked to the market status upgrade.

Which stocks to invest in?

Foreign investors continue to account for a significant share of daily trading value, at around 11-12%, according to ACBS Securities. With continuous net selling pressure throughout the year, most stocks have seen a significant increase in the percentage of shares that foreign investors can own compared to the previous period.

Stocks with ample foreign ownership headroom include VIC, VHM, MSN, ACV, MCH, GAS, VNM, HPG and SSI.

KBSV said the market status upgrade represents more than a label change, describing it as a re-rating process driven by improved market infrastructure and institutional capital inflows. Passive flows from global exchange-traded funds are expected to track index weightings, making leading blue-chip stocks the earliest and most direct beneficiaries.

Based on end-2024 data, FTSE Russell identified 28 Vietnamese stocks, ranging from small- to large-cap, as eligible for inclusion in the FTSE Global All Cap Index. While the final list may change when the official announcement takes effect in September 2026, KBSV expects large-cap and mid-cap stocks to remain on the list, alongside several small-cap stocks that have significantly improved in market capitalization and liquidity.

Brokerage firms are also seen as major beneficiaries, gaining from both rising liquidity and the rollout of new financial products. The market upgrade is expected to lift average daily trading value to $2–3 billion, directly boosting brokerage fees and margin lending revenue for leading securities firms such as VCK, TCX and SSI.