Foreign investors will turn to net buying in anticipation of stock market status upgrade: broker

Foreign investors, after a period of consecutive net selling, may return to net buying on the Vietnamese stock market from end-Q1/2024 in anticipation of a stock market status upgrade from a frontier to emerging market, said Le Duc Khanh, director of analysis at VPS Securities JSC.

In the first trading week of 2024, the stock market showed positive signs with the VN-Index rising by up to 30 points after just four sessions on improved liquidity. Contrary to excitement among domestic investors, foreign investors, after two net buying sessions at the end of 2023, returned to net selling in the first week of the year with a value of more than VND1,000 billion (41 million) on the Ho Chi Minh Stock Exchange (HoSE).

"The net selling pressure of foreign investors is not a worrying issue and cash flow disbursement will increase on the stock market this year," Khanh told The Investor.

According to Khanh, despite geopolitical instability, generally, current forecasts highly appreciate the recovery of the world and region’s economy and the return of slight growth in the Vietnamese economy.

Foreign investors, after a period of consecutive net selling with a total value of nearly VND19,000 billion ($779.8 million) in 2023, may return to net buying in the stock market from the end of the first quarter in 2024 in anticipation of a market status upgrade from frontier to emerging.

"The stock investment channel can strongly attract cash flow, and the VN-Index can increase beyond the 1,250-1,350 point territory in 2024," Khanh said.

According to him, groups such as finance, chemicals, steel, oil and gas, technology, and retail, which had positive 2023 business results, are forecast to have good growth in 2024.

Khanh added that Vietnam's economic growth expectations in 2024 may partly be due to the facilitation of state-funded infrastructure plans and important projects.

Liquidity and capital flow bottlenecks in the financial market and real estate market are gradually being removed and making important progress. Therefore, the investment environment is becoming more positive, not only for domestic investors but also foreign investors, he noted.