The stock market went through August with many emotions and the VN-Index recorded an increase of 180 points. Liquidity recorded a record high month in the market. The market's increase was mainly supported by three major industry groups: banking increased by nearly 19%, securities companies increased by 21% and real estate increased by more than 14%.
Notably, in the last week of August, foreign investors continued to face strong net selling pressure of thousands of billions of VND, including a net selling session of more than 4,000 billion VND, setting a record for net selling matched orders in a session on the Vietnamese stock market. Accumulated in 5 sessions last week, foreign investors net sold more than VND 11,443 billion in the whole market - at the same time setting a record for net sales
According to statistics from stock codes, in the last trading week, HPG continued to be the focus of the strongest net selling point with a value of VND2,624 billion, far surpassing the remaining codes. VPB ranked second with a net selling price of VND 1,009 billion, followed by SSI VND (894 billion) and STB VND 736.8 billion). Many other large-cap stocks are also under pressure to withdraw capital.
According to many experts, the phenomenon of foreign investors suddenly returning to net selling on the Vietnamese stock market after a period of active net buying is mainly a short-term profit-taking act. Since the beginning of July, the VN-Index has increased sharply by nearly 300 points, continuously setting record highs, mainly thanks to the leadership of banking and securities stocks.
With this increase, the valuation of the index according to P/E and P/B is now approaching the 10-year average - meaning it is no longer in the attractive range as before. When the market changes from a low-cost pricing state to a reasonable pricing zone, the slow trend is common. Therefore, the net selling activities of foreign investors in this context reflect the strategy of realizing profits and minimizing portfolio risks.
In addition, exchange rate risks also affect foreign investors' trading strategies. For foreign investors, exchange rate fluctuations increase the risk of exchange rates when investing in VND-denominated assets. Therefore, the restructuring of holding ratio is a reasonable defensive move to preserve portfolio value in the context of unpredictable exchange rate fluctuations.
Although net selling pressure is strong, in the long term, the Vietnamese stock market is still attractive to foreign investors and flexible cash flow is expected to soon return to the Vietnamese market.
Statistics for the past 5 years show that foreign investors have net sold about 5 - 6 billion USD on the Vietnamese stock market. Meanwhile, the net purchase value in July only reached about 500 million USD, which is still quite modest. The trend of net buying again in emerging markets has just begun, so the Vietnamese stock market will continue to benefit from this momentum. In addition, if FTSE upgrades the Vietnamese market to emerging market in the coming time, it is estimated that it can attract an additional 2 - 3 billion USD in foreign capital.
