Foreign investors increase net selling on Vietnam stock market

Foreign investors have net sold more than VND1.64 trillion ($70 million) via order matching on the Ho Chi Minh Stock Exchange (HoSE) since the beginning of April.

Of the figure, VND1.2 trillion ($51.17 million) was recorded in four recent sessions. On Tuesday, their net sales value hit VND571 billion ($24.35 million), the highest since February 23.

Meanwhile, the respective figures for last month and the first quarter of 2023 were over VND3 trillion ($127.9 million) and VND6.96 trillion ($296.8 million).

The vibrant transactions of foreign investors in March mainly came from the positive cash flow in exchange traded funds (ETFs), particularly Fubon Vietnam. Business stocks in cyclical sectors such as banking and steel attracted the most attention.

According to broker Saigon Securities Inc. (SSI), although the government and the State Bank of Vietnam have issued policies to partially remove bottlenecks in the corporate bond and real estate markets, investors remain cautious as listed companies are forecast to post poor business results in the first half of 2023.

Besides, a market upgrade seems unlikely, as FTSE Russell, a leading global provider of benchmarks, analytics, and data solutions, recently announced that it will probably reconsider Vietnam’s membership on its watch list for upgrading emerging markets to type 2 during the next review period in September 2023.

According to SSI analysts, pressure to take profits or restructure portfolios from ETFs will be higher in the coming time after six consecutive net-buying months. However, the interest rate reduction is expected to partially stimulate cash flow from individual investors.

Meanwhile, Viet Dragon Securities (VDSC) noted the news of listed firms’ poor business results in Q1/2023. The broker estimated that their after-tax profit growth in the first quarter will drop 17% compared to the same period last year, mainly due to the declining materials, real estate and consumer goods industries, which account for a high proportion of the profit structure.

According to VDSC, companies have been announcing profit plans for this year at their annual shareholder meetings, and stock prices in companies that posted poor results last year have fallen significantly, meaning there's unlikely to be a major shock when the rest of the figures are revealed in April.

The benchmark VN-Index, which represents the HoSE, expanded 4.11 points, or 0.39%, to 1,069.46 on Tuesday thanks to a rally among real estate stocks at the close.

The major bourse saw nearly 698 million shares traded for VND11.6 trillion ($496.7 million), a drop of 23% from the previous session.