Foreign capital ‘inches back’ to Vietnam stock market: analysts

By Kim Ngan
Tue, March 15, 2022 | 7:28 pm GMT+7
Le Xuan Nghia, Vietnam’s top banking expert, said his biggest hope when it comes to Vietnam’s stock markets this year is the return of foreign investors.

Le Xuan Nghia, Vietnam’s top banking expert, said his biggest hope when it comes to Vietnam’s stock markets this year is the return of foreign investors.

Foreign capital is showing signs of returning to Vietnam’s stock market after net selling was a dominating trend last year and in the first months of this year, analysts said.

Foreign investors’ aggregate net selling in the year to date was VND8.8 trillion ($385 million), down 25% year-on-year, accordingo to Yuanta Securities Vietnam.

“The net selling tends to decline. Foreign investors’ activities are returning in the first months, with rising interest in Vietnamese companies,” Nguyen The Minh, the Ho Chi Minh City-based firm’s chief analyst told a forum on stock market prospects, hosted by The Investor, on Tuesday.

But Minh noted that investment funds will still exercise caution due to geopolitical tensions following the Russia-Ukraine conflict and uncertainties over the Fed’s rate hike plans.

“Given the strong volatility and unpredictable risks, they might not buy in immediately. But we are hopeful and optimistic given the new signs, especially as our economy is reopening.”

Billions from net selling ‘are here to stay’

Le Xuan Nghia, Vietnam’s top banking expert, said his biggest hope when it comes to Vietnam’s stock market this year is the return of foreign investors.

“Their net selling was over $3 billion, but our research on the foreign exchange market shows that the money remains here, on their accounts,” Nghia, head of the Business Development and Research Institute, told the forum.

He stressed that if the country’s macro fundamentals are strong, like an inflation rate of less than 4% (while many countries might see 10%), an economic expansion of around 5.5%, good FDI growth, and especially a stable forex rate which has been so over the past three years, foreign investors will come back.

"Looking at Vietnam’s economic fundamentals and vaccination coverage, I believe foreign investors will prefer to stay here, rather than elsewhere. I expect they will return, contributing to the stability of the market this year and being a firm pillar for the market in 2022 and 2023.”

Nghia added that his research shows Fed is "pretty cautious" in raising interest rates and the hike level might be very low, just 0.25% at a time. “Only when a single hike is up to 0.5%, capital would possibly fly back to the U.S.”

“My expectation is the market this year is positive, though it could not rally like last year.”

Vu Bang, former chairman of State Securities Commission, said the net selling of foreign investor was $3 billion, but the actual outflight was less than $1 billion. “The remaining $2 billion remains on their accounts or has been invested in the primary market, in Vietnamese companies.”

Bang noted that capital outflight is a global trend in recent years, and the Ukraine-Russia conflict might fasten the shifting, which will negatively impact on countries. But that’s also an opportunity for Vietnam."

"Vietnam has a high vaccination coverage, and its economic stimulus is actively deployed, especially toward infrastructure and digital technology. Those elements will catch the eyes of foreign investors.”

Vietnamese investors have shrugged off concerns over foreign investors’ continual net selling since last year. Domestic retail investors opened 1.5 million trading accounts in 2021, up 50% against the total of the period 2017-2020. The tally keeps rising this year to 405,980 in the first two months.

Vietnam’s stock market is assessed as one of the 10 stock markets with the best resilience to the Covid-19 pandemic and best recovery in 2020. VN-Index set new peaks in 2021. At the end of 2021, the major index closed at 1,498.28 points, up 35.7% against the end of 2020 and is considered one of the world’s stock indexes with highest growth.

As of December 28, 2021, the market capitalization reached nearly VND7,729 trillion ($337.7 billion), up 46% against the end of 2020, equivalent to 122.8% of GDP in 2020 and 92% of GDP in 2021.

The market capitalization continued to rise slightly in the first two months of 2022, reaching nearly $340 billion as of February 28, 2022, up 0.2% compared to the end of 2021 and equivalent to 92.6% of GDP.

Comments (0)
  • Read More
Vietnam may welcome more FDI from US allies in Trump 2.0: broker

Vietnam may welcome more FDI from US allies in Trump 2.0: broker

More companies from U.S. allies and elsewhere may move more production facilities to Vietnam in the second term of Donald Trump as U.S. President, given the expected intensification of U.S-China trade tension, according to KB Securities Vietnam (KBSV).

Economy - Mon, November 18, 2024 | 12:19 pm GMT+7

Vietnam PM asks Brazil's aerospace giant Embraer to help with air logistics development

Vietnam PM asks Brazil's aerospace giant Embraer to help with air logistics development

Vietnam seeks to build an air logistics center and plans to collaborate with Brazil’s aerospace giant Embraer for the task, says Prime Minister Pham Minh Chinh.

Companies - Mon, November 18, 2024 | 10:45 am GMT+7

Singapore-domiciled TAEL Two Partners struggles to divest from Vietnam taxi operator Vinasun at loss

Singapore-domiciled TAEL Two Partners struggles to divest from Vietnam taxi operator Vinasun at loss

Singapore-headquartered fund TAEL Two Partners has planned to divest entirely from Vietnamese taxi operator Vinasun at a heavy loss after more than a decade of investment.

Finance - Mon, November 18, 2024 | 10:19 am GMT+7

Vietnam's opportunity in a shifting global EVs market

Vietnam's opportunity in a shifting global EVs market

The global electric vehicle boom presents numerous opportunities for Vietnam's economy, supported by leading technology suppliers like Bühler Group.

Companies - Mon, November 18, 2024 | 10:00 am GMT+7

Vietnam, Brazil elevate bilateral ties to strategic partnership

Vietnam, Brazil elevate bilateral ties to strategic partnership

Vietnam and Brazil issued a joint statement on elevating their bilateral relations to a Strategic Partnership in Rio de Janeiro on Sunday (local time) on the occasion of Prime Minister Pham Minh Chinh’s ongoing trip to the Latin American nation to attend the G20 Summit and join bilateral activities.

Politics - Mon, November 18, 2024 | 8:11 am GMT+7

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

A seminar themed “Removing legal bottlenecks for infrastructure and property investment” will be organized by The Investor in Hanoi on Tuesday.

Companies - Mon, November 18, 2024 | 7:52 am GMT+7

State-owned housing developer HUD has new chairman

State-owned housing developer HUD has new chairman

Dau Minh Thanh, chief of the Ministry of Construction (MoC) Office, has been appointed chairman of the ministry’s Housing and Urban Development Corporation (HUD).

Companies - Sun, November 17, 2024 | 9:34 pm GMT+7

Vietnam private lender LPBank reports $394 mln profit in 10 months

Vietnam private lender LPBank reports $394 mln profit in 10 months

Hanoi-based Loc Phat Vietnam Joint Stock Commercial Bank, or LPBank, logged an after-tax profit of VND10 trillion ($394 million) in the first 10 months of this year, said its leadership at the EGM on Saturday.

Banking - Sun, November 17, 2024 | 3:30 pm GMT+7

Vietnam stock market unlikely to experience further steep declines in next sessions: experts

Vietnam stock market unlikely to experience further steep declines in next sessions: experts

The probability of continued sharp falls in the Vietnamese stock market over the next sessions is relatively low, barring unexpected geopolitical turbulences that could cause significant volatility, according experts.

Finance - Sun, November 17, 2024 | 1:30 pm GMT+7

Taiwan’s Cooler Master gets nod for $125 mln additional investment in northern Vietnam

Taiwan’s Cooler Master gets nod for $125 mln additional investment in northern Vietnam

Taiwan-headquartered Cooler Master, a global computer hardware giant, especially in cooling devices, will invest an additional $125 million in the northern province of Bac Ninh, according to a project report.

Industries - Sun, November 17, 2024 | 10:00 am GMT+7

Vingroup’s hospitality arm Vinpearl becomes public company as part of listing plan

Vingroup’s hospitality arm Vinpearl becomes public company as part of listing plan

Vinpearl JSC, a hospitality subsidiary of conglomerate Vingroup, has completed its registration as a public company, the State Securities Commission of Vietnam (SSC) said on Friday.

Companies - Sun, November 17, 2024 | 9:00 am GMT+7

Vietnam pledges to make more contributions to APEC cooperation

Vietnam pledges to make more contributions to APEC cooperation

APEC leaders adopted a joint statement and endorsed two signature initiatives proposed by host country Peru: the Lima Roadmap to Promote the Transition to Formal and Global Economy and the Ichma Statement on a New Look to Advance the Free Trade Area of the Asia-Pacific.

Politics - Sun, November 17, 2024 | 8:05 am GMT+7

Construction of $2.3 bln central Vietnam LNG power plant to restart in 2026

Construction of $2.3 bln central Vietnam LNG power plant to restart in 2026

Construction of the 1,500-MW Hai Lang Power Center project in Quang Tri province will restart on January 1, 2026, the project investor has informed local authorities.

Energy - Sun, November 17, 2024 | 8:00 am GMT+7

PM arrives in Brazil, beginning trip to attend G20 Summit

PM arrives in Brazil, beginning trip to attend G20 Summit

Prime Minister Pham Minh Chinh, his spouse and a high-ranking delegation of Vietnam arrived in Rio de Janeiro, Brazil on November 16 afternoon (local time), beginning their three-day visit to attend the G20 Summit and have bilateral meetings.

Southeast Asia - Sun, November 17, 2024 | 7:30 am GMT+7

Vietnam-China partnership to enable export of Kim Long brand cars

Vietnam-China partnership to enable export of Kim Long brand cars

Vietnam’s Kim Long Motor and Futa Group have struck a strategic cooperation agreement with China’s Dongfem Dana that will enable the production and export of cars under the Kim Long brand, executives said Friday.

Companies - Sat, November 16, 2024 | 7:13 pm GMT+7

Northern Vietnam province attracts $124 mln investment from Taiwan firm

Northern Vietnam province attracts $124 mln investment from Taiwan firm

Taiwan-based Nien Made Enterprise Co., Ltd. will invest $124.1 million to make furniture accessories at Phu Ha Industrial Park in the northern province of Phu Tho.

Industries - Sat, November 16, 2024 | 7:01 pm GMT+7