Foreign investors returned to be net buyers, cash flow from Thailand was out of the “game”

After a period of continuous buying and peaking in mid-February, the number of Vietnam ETF certificates in the hands of Thais has reversed to decrease sharply and shows no sign of stopping.

After a sudden period of net selling lasting from mid-February to the end of the first week of March, foreign investors returned to net buying in the last 6 consecutive sessions on HoSE with a total value of nearly 2,300 billion dong. However, in the past one month, foreign investors still net sold nearly 1,000 billion dong.

The above trend partly comes from the move of “turning the car” of Thai investors. After continuously being bought and peaked in mid-February, the number of ETF certificates in Vietnam in the hands of Thais has reversed sharply and shows no sign of stopping.

As of March 13, the volume of DR depository certificates based on the DCVFM VNDiamond ETF (FUEVFVND) issued by Bualuang Securities has decreased to 172.8 million units, down 11.7 million units from the peak. a month ago and is the lowest level since early 2022.

Similarly, the amount of DR based on the fund certificates DCVFM VN30 ETF (E1VFVN30) has also decreased by nearly 24 million units in the past one month, to 230.2 million units. This is the lowest level since 11/22/2022

The conversion ratio between DR and base fund certificates is 1:1 which means that Thai investors currently indirectly own 172.8 million FUEVFVND fund certificates and 230.2 million E1VFVN30 fund certificates.

Thai investors are still out of the game, making the cash flow into the ETF duo of DCVFM continue to weaken. From the beginning of March, DCVFM VNDiamond ETF saw a net withdrawal of 70 billion dong, the first time since September last year. The weakening of money inflow into this ETF has extended to the 4th consecutive month.

Meanwhile, DCVFM VN30 ETF has not been withdrawn but the cash flow value is almost negligible. From the beginning of February until now, this ETF has only netted 29 billion dong, less than the odd part of the first month of 2023.

At the moment, DCVFM VNDiamond ETF and DCVFM VN30 ETF are still the two largest domestic ETFs in Vietnam’s stock market, with a net asset value (NAV) of VND 18,300 billion and VND 8,300 billion, respectively.

The DCVFM VNDiamond ETF is based on a basket of VNDiamond indices including all stocks with no room, while the DCVFM VN30 ETF is modeled after VN30 – the largest market capitalization group on HoSE by freefloat ratio.

While DCVFM VNDiamond ETF and DCVFM VN30 ETF level off, attention is being focused on foreign ETFs. On March 15, Fubon FTSE ETF will start the 5th additional mobilization with the approved amount of TWD 5 billion (~ USD 160 million). Thus, after much speculation, this ETF will soon pour an additional 4,000 billion dong to buy Vietnamese shares.

Besides, VNM ETF will officially change the reference index from MVIS Vietnam Index (88.9% Vietnamese stocks) to MVIS Vietnam Local Index (100% Vietnamese shares) from March 17, 2023. The portfolio size of this ETF is currently around $500 million. It is estimated that VNM ETF will buy an additional $55 million (~ VND1,300 billion) of Vietnamese shares this week.

This move is expected to positively support the market in the context that active funds are selling “massively” recently. Typically, Dragon Capital group has continuously sold, especially the billion USD VEIL fund after “full” shares in mid-January.

One of the factors causing the weakening of foreign investors’ buying power comes from the unattractive valuation of Vietnamese securities, especially after the fourth quarter reporting season with the profits of listed companies dropping deeply. . Although the market has continuously corrected recently, the P/E of VN-Index is still at approximately 12 times, significantly higher than the bottom.

The global economic recession is forecasted to have a negative impact on business operations in the coming time. With the high comparability in the same period, the profits of listed companies are likely to fall further in the first quarter and possibly even in 2023. This will make the market valuation not really cheap. becomes more expensive and becomes a barrier to attracting foreign capital in the short term.

Ha Linh/Market Lifestyle