The stock market has gone through 4 trading sessions after the Lunar New Year holiday with positive developments, with 3 sessions of quite good increases. Market liquidity has also improved with the excitement of domestic investors' capital flow. In the short term, if domestic buying power continues to be maintained and liquidity does not encounter obstacles, the market may maintain its upward momentum.
However, the story of foreign net selling is still something that investors are closely following, especially on bluechip stocks that foreign investors have focused on net selling recently. Statistics in 4 trading sessions after Tet holiday, foreign investors net sold more than 3 trillion VND.
2025 is expected to be a pivotal year for the breakthrough of the Vietnamese stock market, thanks to many important supporting drivers. In particular, the story of upgrading the Vietnamese stock market will be a very important topic in 2025. With Circular 68 being implemented and the amended Securities Law being passed by the National Assembly, Vietnam will apply the central clearing mechanism (CCP) and take steps to expand the room for foreign investors. Industries without room restrictions will have to open 100%, while industries with restrictions will consider partially expanding the room.
These are important steps for Vietnam to meet MSCI's market upgrade conditions. For FTSE, most of the upgrade conditions have been completed and 2025 is likely to be the time when FTSE officially upgrades its market. This is expected by experts to help attract strong foreign capital flows, thereby promoting growth in market scores and liquidity.
It can be said that this is a golden opportunity, but it also has many potential risks. The room expansion for foreign investors is only part of it, while factors such as the VND/USD exchange rate and global trade policy can cause this capital flow to suddenly "lose steam".
Dr. Nguyen Duy Phuong, Strategic Investment Director of DG Capital, analyzed that, in theory, foreign investors will not sell strongly in 2025 because they have sold for the past two years and the peak was in 2024, so there will be little need to sell more. However, foreign cash flow in 2025 will still be unknown, because US President Donald Trump's new policy focuses heavily on tariff tools, creating a tariff war between countries as well as making the US inflation situation likely to return.
Mr. Phuong said that in 2025, it is necessary to observe the policies of US President Donald Trump. If US President Donald Trump imposes strong taxes, foreign investors will still sell net, but not as strongly as in 2024. On the contrary, it is also necessary to consider that if the Vietnamese stock market is officially upgraded as planned, the ability to attract large capital flows is very strong. The cash flow of investment funds to the Frontier Market is not large, but when upgraded to the Secondary Emerging Market, the fund size of several billion USD, corresponding to many times more than before, is easy to encounter.
“Foreign investors may return to net buying by the end of the first quarter of 2025, when the Vietnamese stock market will be reviewed for inclusion in the FTSE Russell upgrade list. If nothing changes, this will be enough positive information to attract foreign investors willing to invest in the market sustainably,” Mr. Phuong said.
