In the morning trading session of July 10, VN-Index temporarily stopped at 1,294.66 points, up slightly by 0.95 points compared to the previous session. Foreign investors continued to net sell more than VND523 billion. This is the 10th consecutive net selling session of foreign investors on the HoSE. Meanwhile, statistics by the end of June showed that foreign investors had net sold more than VND50,000 billion on all three exchanges HoSE, HNX, and UpCoM, which more or less affected market fluctuations and investor sentiment.
Nguoi Lao Dong Newspaper discussed with Mr. Dinh Duc Minh, Investment Director, VinaCapital Investment Fund, about the factors that caused foreign investors to net sell.
- Reporter: In the first half of this year, foreign investors net sold about 2 billion USD (more than 50,000 billion VND), the highest net selling level since 2011. What is the main factor that makes foreign investors continuously net sell despite the recovery data of Vietnam's economy ?
+ Mr. Dinh Duc Minh: The main reason for foreign investors' continuous net selling in the Vietnamese stock market is that the US Federal Reserve (FED) has maintained high interest rates for a long time. Therefore, foreign investors' money flows tend to shift to the US to enjoy higher interest rates and less risk.
Mr. Dinh Duc Minh, Investment Director, VinaCapital
At the same time, the rise of stocks in the field of artificial intelligence (AI) and semiconductors in the US also attracted foreign money. In addition to the US, money also flowed into the stock markets of Taiwan (China) and South Korea, which are markets with many investment opportunities in the fields of semiconductor technology and AI.
More broadly, foreign investors' net selling occurs not only in Vietnam but also in most other emerging markets for the same reason.
- Despite the net selling momentum of foreign investors, domestic investors still "balance everything", as evidenced by the fact that VN-Index has still increased well recently?
+ From the beginning of the year to the first week of July 2024, the VN-Index increased by 13.6% in VND and 8.4% if converted to USD. The Vietnamese stock market has increased better than other markets in the ASEAN region and the MSCI indexes of emerging markets and frontier markets.
This positivity is due to the purchasing power of domestic investors, accounting for 85-90% of transactions in the market. With the expectation that the economy will recover positively in 2024-2025 and the interest rate environment - although slightly increased compared to last year - is still at a relatively attractive level for the stock investment channel.
- So, according to you, when will foreign investors continue to sell net?
+ Although it is difficult to accurately forecast foreign capital flows, we see a number of factors that may make foreign investors more interested and see more investment opportunities in Vietnam.
First, Vietnam's economy is recovering faster than expected. With GDP growth of 6.4% in the first half of the year, the Ministry of Planning and Investment has proposed a scenario of economic growth of 6.5 - 7% for the whole year of 2024, compared to the target of 6 - 6.5% at the beginning of the year.
VN-Index has increased by nearly 14% since the beginning of the year, despite foreign net selling.
Second, many forecasts show that the FED will start to reduce interest rates in the near future. The reduction may not be much, but investors will see it as a major shift in US monetary policy.
Third, if Vietnam's stock market is upgraded to emerging market status by 2025 as targeted, it will attract cash flow from investment funds into emerging markets.
What is the trend of the stock market in the second half of the year? Is it still attractive compared to other investment channels such as savings, gold or real estate?
+ We expect the Vietnamese stock market to continue to have positive prospects in the coming time as the economy is recovering faster than expected. Listed companies can achieve positive business results throughout this year.
For the portfolio of stocks that VinaCapital tracks, accounting for about 90% of market capitalization, the forecast is that the total profit growth of these businesses can reach about 20% for the whole year. Although the stock market can still be affected by pressure from exchange rates and interest rates, this pressure will be reduced in the coming time.
Source: https://nld.com.vn/vinacapital-noi-gi-ve-dong-thai-ban-rong-gan-50000-ti-dong-cua-khoi-ngoai-196240710111615171.htm
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