The market recovered strongly, foreign investors slowed down their net buying

In a recent month, foreign investors have net bought up to 18,700 billion dong. Foreign investors were only slight net sellers in 2 sessions and are having a series of 18 consecutive net buying sessions.

Recently, transactions of foreign investors suddenly became the focus on the stock market after a period of being somewhat inferior to the wave of domestic investors. The strong return of foreign investors has contributed significantly to helping the market recover quickly from the 2-year bottom in mid-November.

According to statistics, foreign investors have net bought up to 18,700 billion dong in the past one month. Foreign investors were only slight net sellers in 2 sessions and are having a series of 18 consecutive net buying sessions. The buying force was very decisive with a multi-session net buying value of up to trillions of dong. This was one of the fastest and strongest net buying periods in the history of Vietnamese securities.

However, the net buying of foreign investors has slowed down markedly in recent sessions when the market has recovered relatively. VN-Index gained nearly 16% from the bottom, leading to many Blue-chips recovering strongly with an increase of tens of %. The pressure to take profit appeared more dense while the buying force was no longer “massive” like when the market hit the bottom. Even in terms of volume, foreign investors broke the chain of net buying from the previous session on December 14.

Not excluding the possibility, the withdrawal of the rumored cash flow named P-Notes (Participatory Notes) is one of the reasons why foreign investors’ buying power “short of breath”. This is an unpredictable and fast cash flow, so it will significantly affect the market’s movements in the short term and is often considered highly speculative.

In a comment in early December, Mr. Huynh Minh Tuan – Founder of FIDT Joint Stock Company said that P – Notes often comes in at times when the market looks very weak, with low liquidity or after a period of sharp decline. . “Currently, this capital inflow may have been somewhere for about 2 weeks and according to subjective predictions, this inflow will continue until the middle or end of December,” said the expert.

However, the slowdown of foreign investors in a few sessions is not enough to confirm any trend. Even if the cash flow of P-Notes actually withdraws, it cannot be denied that the attractiveness of Vietnamese securities to foreign investors is increasing. Besides the re-disbursement of large active foreign funds such as Dragon Capital, VinaCapital, foreign capital is still “massively” pouring into Vietnamese stocks through the ETF channel.

Since the beginning of November, six large ETFs in the market have netted more than 11,300 billion dong, thereby bringing the total value of capital inflows from the beginning of the year to nearly 21,000 billion dong. Most of the ETFs attracted money, notably Fubon FTSE Vietnam ETF and DCVFM VNDiamond ETF with a net withdrawal value of 11,500 billion dong and 7,100 billion dong, respectively.

Most recently, VanEck Vietnam ETF (VNM ETF) decided to change the base index MVIS Vietnam Index to MarketVector Vietnam Local Index from March 17, 2023. With this change, VNM ETF is expected to increase the proportion of Vietnam to 100%, equivalent to more than 100 million USD will be poured into buying Vietnamese shares.

Previously, the Fubon FTSE Vietnam ETF was also approved by the Financial Supervision and Administration Commission for the 4th time with the capital of 5 billion TWD (~160 million USD), equivalent to about 4,000 billion dong. The fund has called for capital since November 29 and immediately disbursed hundreds of billions of dong to buy Vietnamese shares right after.

Assessing the Vietnamese stock market, Dragon Capital said that it is likely that the peak of pessimism has passed when the Government will come up with solutions to help businesses overcome difficulties in the corporate bond market. Mortgage sales plummeted, and China is about to reopen.

In the long term, the Government also requires ministries and agencies to issue a Decree to regulate related decrees for the stock, securities and real estate markets. The above measures, along with the promotion of public investment are expected to help solve the domestic liquidity problem and create a stable foundation to maintain a solid growth momentum in the long term.

Sharing the same opinion, Mr. Petri Deryng said that the stormy days that Vietnam’s stock market has just experienced will bring bright profit prospects in the coming year. “Investor confidence has improved, we can expect the VN-Index to follow the growth path of the economy and the prospect of corporate earnings growth in the next 12 months. Among ASEAN countries, the economic growth and profitability prospects of listed companies in Vietnam are the strongest” , emphasized the head of PYN Elite Fund.

Ha Linh/Market Lifestyle