The stock market is still trying to maintain the 1,300-point mark after many difficulties thanks to the biggest support being domestic cash flow. Meanwhile, contrary to investors' forecasts, the cash flow of foreign investors (foreign investors) is still causing great pressure due to strong net selling pressure.
In just the first 3 months of 2025, the Vietnamese stock market witnessed an unprecedented period of "discharge". Accumulated in the first quarter of 2025, foreign investors net sold approximately VND26 trillion in the whole market, equivalent to more than 1 billion USD, were withdrawn from the Vietnamese stock exchange. This net selling force is equivalent to 20% of the total net selling value for the whole year of 2024 and is almost equal to the whole year of 2023.
The net selling momentum in the first 3 months of the year focused on FPT technology stocks, with a value exceeding VND6,800 billion. Immediately after that, VNM shares were recorded to have been net sold for nearly VND 2,200 billion since the beginning of the year. In addition, some bank codes and securities also recorded a net selling value of over VND 1,200 billion in the past 3 months.
According to experts, this pressure mainly comes from exchange rate increases and the trend of withdrawing capital from emerging markets, including ASEAN. The net selling trend also shows the certain caution of foreign investors in Vietnamese stocks.
The market has always agreed about the attractiveness of Vietnamese stocks, as well as the possibility of early promotion to Emerging Market (arranging market) to attract foreign capital, but in reality, the opposite is happening. Vietnam is a market that has been sold strongly for 4/5 recent years, with the largest selling rate in the region if calculated on the capitalization or total value held by foreign investors.
Another reason is that the valuation of the Vietnamese stock market is not more attractive than other markets, although most of the capitalization is in the group with high cyclical risks such as banking, finance and real estate. The market is still lacking quality goods. The number of newly listed enterprises is very small, and the number of truly notable names is even scarce.
In the March 2025 strategy report, SSI Securities Investment Analysis and Consulting Center (SSI Research) assessed that global investment cash flow is showing that foreign investors are cautious about disbursing into stock funds and looking for other assets such as bonds or currencies.
For stocks, capital flows into developed market stocks still maintain the net buying trend. However, capital flows into emerging market stocks have been withdrawn sharply. In the Vietnamese stock market, the scale of net withdrawals increased in both ETF and active funds.
Reversing foreign capital flows back to the Vietnamese stock market is not simple and will hardly happen in the short term. Expectations for the return of foreign capital flows in the Vietnamese stock market are still facing many barriers and challenges.
Factors such as global economic developments, monetary policies of major economies and the attractiveness of the domestic market compared to other regions can all affect the decisions of foreign investors. Therefore, this process will be difficult to take place in the short term and more time will be needed for more favorable conditions to take shape.
The participation rate of foreign investors is gradually decreasing, while domestic cash flow is increasingly interested in stocks, helping to limit the impact of net selling pressure on the market. On the contrary, in the medium term, when global macro factors are stable, the return of foreign capital flows can become an important catalyst for the Vietnamese market, especially when receiving the upgrade signal from FTSE Russell.
