Foreign players net unload record value of Vietnam shares, erasing net buy since 2010

By Quang Minh
Mon, July 15, 2024 | 4:59 pm GMT+7

Foreign investors have net sold VND60,501 billion ($2.38 billion) worth of Vietnamese securities listed on the Ho Chi Minh Stock Exchange, the country’s main bourse, so far this year, the highest value so far during one year.

The value even exceeded VND58,051 billion ($2.29 billion) worth of net sales on the bourse in the whole of 2021, exchange data showed.

Traders watch stock prices. Photo by The Investor/Trong Hieu.

Traders watch stock prices. Photo by The Investor/Trong Hieu.

Between 2010 and 2019, international players mainly net bought Vietnamese equities, except for 2016 when they net unloaded VND7,729 billion ($304.6 million at the current exchange rate). Notably, they net bought VND43,075 billion.

Since 2020, net selling has prevailed, except for 2022 when they net bought VND26,674 billion ($1.05 billion) on the HoSE. As a result, they have net sold nearly VND29 trillion worth of HoSE-listed equities since 2010.

SSI Research, the research division of leading brokerage house Saigon Securities (HoSE: SSI), said in a recent report that ETFs have net withdrawn a total of VND15,700 billion ($618.7 million) in the year to date, cutting their portfolio value to VND66 trillion.

Among them, iShares Frontier & Select EM ETF, managed by BlackRock, has significantly reduced its Vietnam exposure after a liquidation announcement last month.

Furthermore, they have observed net withdrawals at Vietnam-focused active funds.

They predicted net selling pressure to wane in the coming months given their smaller exposures.

Why foreign net sales?

Foreign sales in Vietnam track the reshuffle of global investments when international players have been fleeing frontier markets or those with weaker local currencies. The Vietnamese dong has lost circa 5% in value against the U.S. dollar in the year to date, despite strong intervention by the central bank.

Like in Vietnam, foreign investors have been withdrawing from Thailand and China.

Some of Vietnam’s peculiarities have disappointed foreign investors. Two major index providers, FTSE Russell and MSCI have yet to upgrade the country’s stock market status. The benchmark VN-Index of the HoSE has been moving in the 1,200-1,300 territory.

In addition, the privatization of state-owned enterprises has been sluggish while the IPO market has been tepid, offering few attractive “goods.”

Listed companies in the finance-banking and real estate industries have prevailed in terms of both number and market cap (around 60% of the total). These industries are characterized by cyclicity and their performances depend greatly on credit growth.

Meanwhile, industries such as technology, healthcare, pharmaceuticals, retail sales, and utilities that are favored by foreign investors account for a small share. This supply shortage narrows foreign investors’ access to the local stock market.

Although foreign trading has lost much influence on the Vietnamese stock market, prolonged selling has dampened domestic investor sentiment, according to industry insiders.

However, their net sales have not impacted the local stock market too negatively as the VN-Index has stayed steady in the 1,280 zone. Foreign trading now accounts for around 18-20% of daily trading, much lower than the 30-50% seen prior to 2020, said Bui Van Huy, a manager at DSC Securities.

Huy expected foreign investors to reduce selling or even return to buying as Vietnam’s stock market upgrade nears.

Comments (0)
  • Read More
Vietnamese oil & gas sector’s Q3 profits up for upstream firms, down for downstream firms

Vietnamese oil & gas sector’s Q3 profits up for upstream firms, down for downstream firms

Upstream oil and gas companies in Vietnam reported robust profit growth in the third quarter of this year, but downstream peers were hit by declining oil prices.

Companies - Tue, November 5, 2024 | 8:01 am GMT+7

Indonesia targets comprehensive fuel subsidy scheme reform

Indonesia targets comprehensive fuel subsidy scheme reform

Indonesian Energy Minister Bahlil Lahadalia has said the country is conducting a thorough exercise to reform its fuel subsidy scheme.

Southeast Asia - Mon, November 4, 2024 | 10:50 pm GMT+7

Tech companies invest in data centers in Thailand

Tech companies invest in data centers in Thailand

Thailand’s Board of Investment (BOI) has approved investment support for two large data centre projects in the country worth over THB60 billion ($1.7 billion).

Southeast Asia - Mon, November 4, 2024 | 10:49 pm GMT+7

Indonesia upgrades sea wall system to protect Jakarta

Indonesia upgrades sea wall system to protect Jakarta

Indonesian Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono has stated that the construction of sea walls was one of the priorities of President Prabowo Subianto.

Southeast Asia - Mon, November 4, 2024 | 10:47 pm GMT+7

Where real estate and urban development meet

Where real estate and urban development meet

The Transit-Oriented Development (TOD) itself, if properly planned and implemented, can lower the barrier to the use of public transport, lessen the dependency on private vehicles, contributing to the liveability of communities and cities, write Avison Young Vietnam analysts.

Consulting - Mon, November 4, 2024 | 8:49 pm GMT+7

AI helps sellers offer competitive prices on e-commerce platforms: Lazada trainer

AI helps sellers offer competitive prices on e-commerce platforms: Lazada trainer

When sellers carry out promotions on e-commerce platforms, artificial intelligence can help ensure their prices remain competitive, says Nguyen Tran Tin, a seller and trainer at Lazada Academy.

Companies - Mon, November 4, 2024 | 8:07 pm GMT+7

Vietnam plans $7.3 bln rail route linking 2 northern provinces bordering China

Vietnam plans $7.3 bln rail route linking 2 northern provinces bordering China

Vietnam Railway Authority under the Ministry of Transport has proposed a 448-km long, VND183,856 billion ($7.26 billion) route running between the northern provinces of Lao Cai and Quang Ninh, both sharing a border with China.

Infrastructure - Mon, November 4, 2024 | 7:14 pm GMT+7

Vietnam agribusiness HAGL trains focus on domestic market, inks pact with Kingfoodmart

Vietnam agribusiness HAGL trains focus on domestic market, inks pact with Kingfoodmart

Vietnamese agri major Hoang Anh Gia Lai JSC (HAGL) is looking to tap domestic market potential afresh by distributing its products through the Kingfoodmart supermarket chain.

Companies - Mon, November 4, 2024 | 7:08 pm GMT+7

Mixed performance by Vietnam commercial banks in Q3

Mixed performance by Vietnam commercial banks in Q3

Vietnamese commercial banks have had a mixed third quarter, with some reporting substantial profit gains while others seeing steep declines or even losses.

Banking - Mon, November 4, 2024 | 4:52 pm GMT+7

Vietnam’s Vingroup, UAE's NMDC to collaborate in offshore wind power

Vietnam’s Vingroup, UAE's NMDC to collaborate in offshore wind power

Vietnam’s leading conglomerate Vingroup and the UAE-based NMDC Group will collaborate in offshore wind power, the latter said in a recent filing sent to the Abu Dhabi Securities Exchange (ADX).

Energy - Mon, November 4, 2024 | 4:20 pm GMT+7

Military-run Viettel Group has 2 more deputy general directors

Military-run Viettel Group has 2 more deputy general directors

General Phan Van Giang, Minister of National Defence, has appointed Cao Anh Son and Nguyen Dat as deputy general directors of Military Industry and Telecommunications Group (Viettel Group), starting last Friday.

Companies - Mon, November 4, 2024 | 3:14 pm GMT+7

Mega Long Thanh airport first phase should be completed in Sept 2026: senior parliament official

Mega Long Thanh airport first phase should be completed in Sept 2026: senior parliament official

Relevant agencies should prepare to complete the first phase of the $14-billion Long Thanh International Airport project on September 2, 2026, as soon as the Vietnamese National Assembly approves changes to the project, said a senior parliament member.

Infrastructure - Mon, November 4, 2024 | 12:44 pm GMT+7

Fed rate cuts, upgrading efforts to lure foreign investors back into Vietnam stock market: VinaCapital

Fed rate cuts, upgrading efforts to lure foreign investors back into Vietnam stock market: VinaCapital

The U.S. Fed’s rate cut cycle and the Vietnamese government’s fresh efforts to upgrade the local stock market status are likely to bring foreign investors back into the stock market next year, according to VinaCapital.

Finance - Mon, November 4, 2024 | 11:42 am GMT+7

Foxconn’s subsidiary Shunsin to invest $80 mln in northern Vietnam to produce integrated circuits

Foxconn’s subsidiary Shunsin to invest $80 mln in northern Vietnam to produce integrated circuits

Shunsin Technology (Bac Giang, Vietnam) Limited, a subsidiary of Taiwanese giant Foxconn, will invest $80 million in Vietnam’s northern province of Bac Giang to produce integrated circuits (IC).

Industries - Mon, November 4, 2024 | 10:44 am GMT+7

Q3 earnings of Vietnam’s listed firms up 21.6%: FiinGroup

Q3 earnings of Vietnam’s listed firms up 21.6%: FiinGroup

Net profits of listed companies in Vietnam increased 21.6% year-on-year in the third quarter of this year, maintaining a stable growth rate since the start of this year, according to local financial data provider FiinGroup.

Finance - Mon, November 4, 2024 | 9:31 am GMT+7

Thailand SCG’s revenue in Vietnam up 15% to $1.1 bln in Jan-Sept

Thailand SCG’s revenue in Vietnam up 15% to $1.1 bln in Jan-Sept

Thailand’s Siam Cement Group (SCG) recorded a revenue of THB36.71 billion ($1.08 billion) in Vietnam in the first nine months of this year, up 14.7% year-on-year.

Companies - Mon, November 4, 2024 | 8:00 am GMT+7