'Reversal signal' from foreign investors after 2 years of net selling
Despite a persistent net selling trend since the start of the year, foreign investor activity in the first half of May has been described by several analysis groups as signaling a potential “reversal” after two years of consistent divestment.
After two years of net selling, foreign investors returned to net buying in the Vietnamese stock market during the trading sessions in early May. On May 14 alone, they recorded a net purchase of VND2,300 billion ($88.57 million). Across the Ho Chi Minh Stock Exchange (HoSE), net buying by foreign investors totaled more than VND4,200 billion ($161.74 million) in the first half of the month.

Tran Anh Tuan, director of the analysis center at Petroleum Securities JSC (PSI), speaks at the Financial Street talk show. Photo courtesy of the talk show.
Speaking at a recent talk show named "The Financial Street" on VTV 8 channel, Tran Anh Tuan, director of the analysis center at Petroleum Securities JSC (PSI), noted that alongside broader market improvements, foreign investors unexpectedly shifted to strong and continuous net buying in the first half of May. However, since the beginning of 2025, their total net selling value stood at approximately VND42,000 billion (over $1.61 billion).
According to Tuan, this selling pressure has been rising largely due to the impact of reciprocal tariff policies. Compared to the record net selling of over VND92,000 billion ($3.54 billion) in 2024, the first four months of 2025 alone saw net selling nearly half the whole-2024 tally.
“Still, foreign investors account for only a small share of overall market activity, so their selling doesn't significantly impact the Vietnamese stock market in the medium to long term,” he explained.
Foreign investors currently contribute only about 7% to 9% of daily transaction value. Furthermore, the withdrawal of foreign capital is not unique to Vietnam - it has been observed in other markets such as China, Indonesia, and Thailand, he added.
Despite this long-term trend of capital outflows, Tuan believes that new positive factors are emerging and may enhance Vietnam’s appeal to international investors.
One key strength is the country’s stable macroeconomic environment. Vietnam’s GDP grew by 6.93% in Q1/2025, the highest first-quarter growth in five years.
Even with the U.S. expected to impose some of the highest tariffs on Vietnamese goods, international organizations project that Vietnam’s GDP could grow by 6.5-7% in 2025. While slightly below the National Assembly’s target, this rate was high compared to regional and global levels.
According to him, domestic factors driving this growth include proactive monetary policy by the State Bank of Vietnam, which has kept inflation and exchange rates under control in recent years.
Public investment and a recovering real estate sector are also set to be major contributors to growth in 2025, especially as global trade tensions escalate.
Another critical development is the launch of the new KRX trading system on May 5, 2025. This system is expected to bring Vietnam’s market infrastructure closer to international standards by enhancing transparency and improving trading efficiency. As a result, the outlook for a market upgrade is more promising than ever.
“Vietnam is likely to be upgraded to emerging market status by FTSE Russell in its September 2025 review. This could attract around $6 billion in passive capital from ETFs and index-tracking investors,” added Tuan.
Supporting this view, Tran Quoc Toan, director of Branch 2 at Mirae Asset Securities (Vietnam), noted that Vietnam saw a net foreign capital inflow in May, aligning with trends across other emerging Asian markets. Foreign investors made net purchases totaling nearly VND2,000 billion ($77 million), with notable activity in the retail, real estate, and basic resources sectors.
Toan expects this net buying trend to continue as reciprocal tariffs ease, trade relations with the U.S. improve, and Vietnam maintains prominent economic growth compared to neighboring countries.
He also emphasized that once Vietnam is upgraded to emerging market status, additional capital from both active funds and index-based ETFs could flow into Vietnamese equities at a scale of several billion U.S. dollars. Thereby bringing many expectations for the recovery of the stock market.
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