Foreign holdings of Vietnamese shares hit decade-long low: VinaCapital
Foreign investors’ holdings in Vietnam’s stock market has fallen to the lowest level in a decade after its latest selling spree, says leading asset management company VinaCapital.
The selling was prompted by profit taking, concerns about the circa 4% year-to-date depreciation of the Vietnamese dong (VND), and because some of the foreign investors were taking a “wait and see” approach to investing in Vietnam in light of recent political developments in the country, said VinaCapital chief economist Michael Kokalari.
One-quarter of foreign selling transpired via ETF redemptions, including the dissolution of Blackrock’s iShares Frontier ETF which was liquidated in June. Monthly foreign net sales of Vietnamese stocks hit a record high the same month, driven in part by the liquidation of this ETF.

VinaCapital expects stronger earnings growth in H2/2024. Photo courtesy of Pinetree Securities.
Data from the Ho Chi Minh Stock Exchange shows that overseas players have net offloaded VND60,449 billion ($2.36 billion) on the bourse since the start of this year, even higher than the record net-selling figure for the whole of 2021.
Meanwhile, retail investors have dominated stock market trading in Vietnam, accounting for 90% of daily trading value on average this year, so purchases by retail investors completely absorbed an estimated $2.4 billion worth of Vietnamese stocks that foreign investors have sold this year, following $1 billion of sales last year.
Since the HoSE was launched in 2020, foreign investors’ accumulated net buying value has dwindled to just VND6 trillion ($238 million). Meanwhile, the total market cap of the bourse hit VND5,123 trillion Wednesday (July 31).
Kokalari commented in a report that selling linked to the liquidation of iShares Frontier ETF is complete; and some “sophisticated” foreign investors have been taking advantage of foreign selling to increase their long-term strategic investments in Vietnam.
For example, Capital Group, Fidelity and other foreign institutional investors reportedly bought a large stake in ACB, Vietnam’s leading retail lender, earlier this year.
Positive H2/2024, 2025 outlook
VinaCapital expects earnings growth to accelerate from an estimated 9% year-on-year in H1/2024 to 33% in H2/2024, driven in part by the nascent recovery of the country’s real estate market.
The firm notes that the ongoing recovery of Vietnam’s real estate market has gained considerable momentum since December 2023 when it began thawing from a frozen state. VinaCapital analysts estimate that real estate transaction activity surged by about 40% year-on-year in H1, up from 25% year-on-year in Q1, driven by pent up demand and a series of laws recently enacted by the government to revive the market.
Consequently, they expect the earnings of real estate developers to surge 80% this year. Furthermore, a healthier real estate market should support banks’ earnings by boosting credit growth and reducing asset quality concerns and credit costs, they say.
The recovery of Vietnam’s real estate sector is likely to further accelerate next year, which is one reason why the fund manager expects VN-Index earnings to grow by another 17% in 2025.
Leadership changes, pro-growth policies
Foreign investors have been paying closer attention to recent political developments in Vietnam and are especially focused on assessing how Vietnam’s leadership will continue the country’s pro-growth policies, said Kokalari.
Vo Van Thuong stepped down as Vietnam’s President in March, more than one year after the resignation of his predecessor Nguyen Xuan Phuc. Vuong Dinh Hue resigned as National Assembly Chair in April.
Party General Secretary Nguyen Phu Trong passed away on July 19 after holding the top position for more than 13 years.
“We believe that no matter who ends up occupying the country’s key leadership positions, government policy is likely to remain focused on attracting FDI and boosting the country’s economic growth,” Kokalari said.
He added that related policies have been remarkably consistent over the past 25 years, and “we firmly believe that they will continue to drive growth and development for years to come.”
Meanwhile, earlier this month, South Korea-invested KB Securities Vietnam JSC revised down its forecast for the benchmark VN-Index to reach 1,320 points this year from 1,360 in its previous report.
The broker said the revision was based on earnings-per-share (EPS) growth projection of the VN-Index going down to 14% from the previously predicted 19%, after lower-than-expected Q1 earnings of banks and real estate businesses.
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