The Vietnamese stock market experienced many "storms" in the first trading month of 2025, clearly shown by the fact that the VN-Index had a sharp decline to below 1,230 points and only recovered in the second half of the month, accompanied by a continued decline in liquidity. In that context, foreign investors net sold 14 out of 17 trading sessions, bringing the total net selling scale in January to nearly 6.5 trillion VND.
Looking back at 2024, due to high interest rates and a strong USD, foreign investors have sold quite strongly in the Vietnamese stock market, but foreign investors still maintain special interest in the Vietnamese market.
Foreign funds in Vietnam in 2024 achieved returns of 15% or more, showing that despite some market difficulties, they can still bring attractive returns to investors.
Entering 2025, factors that impacted strong net selling pressure in 2024 such as the appreciation of the USD, interest rate differentials, and high government bond yield differentials have tended to be less stressful.
From there, experts are still confident in their forecast that foreign capital will return to the Vietnamese stock market in 2025, thanks to expectations of upgrading the market to the emerging market group. This will create great opportunities for international investment funds to continue to disburse into listed stocks in Vietnam, especially when the economic indicators and current market valuations are attractive.
According to experts from Saigon - Hanoi Securities Company (SHS) in a recent strategic report, 2025 is expected to be a challenging year in exchange rate management, with the policy of keeping the USD/VND interest rate differential (SWAP) negative most of the time as in recent years, along with the expectation that the Fed will only cut interest rates twice more.
SHS also considers the scenario of foreign investors continuing to net sell as one of the risk and uncertainty factors for the stock market in 2025, when the interest rate gap remains high and the market does not have new quality supply. Other risks include high margin debt ratio, geopolitical tensions in the world and developments in the world economy, Vietnam under pressure from US tariffs.
However, SHS expects that Vietnam's upgrade to FTSE's Secondary Emerging market in September 2025, if successful, could attract a relatively large amount of foreign investment, mainly from emerging market funds in the US.
Dr. Nguyen Duy Phuong, Director of Investment Strategy at DGCapital, said that macroeconomic risks will occur in the first half of 2025 due to concerns about US tariff policies. However, in the second half of the year, Vietnam will not be mainly affected by tariff policies. Combined with the upgrading factor, the third and fourth quarters will be the period when cash flow increases more strongly, and foreign investors return to net buying.
