The Ho Chi Minh City Stock Exchange (HOSE) has just announced regular information for January 2025, in which, notably, the continued net selling momentum of foreign investors. Accordingly, foreign investors net sold nearly 6.5 trillion VND in the first month of 2025. The total transaction value of this group in the month reached nearly 46.3 trillion VND, accounting for more than 12% of the total transaction value of the whole market.
The figure of 5 billion USD, equivalent to more than 128.4 trillion VND, is the net selling value of foreign investors on the Vietnamese stock market since the beginning of 2023. In the past 26 months, foreign investors have only temporarily stopped selling in January, March 2023 and January 2024.
This may be a period of unprecedented pressure on foreign investors to sell off their stocks. Experts say the depreciation of the VND against the USD affects the performance of foreign investment funds and limits their ability to attract capital.
In addition, factors such as global economic developments, monetary policies of major economies and the attractiveness of the domestic market compared to other regions can all influence foreign investors' decisions. Therefore, this process is unlikely to happen in the short term and more time is needed for more favorable conditions to take shape.
SGI Capital analysts stated that the market has always agreed on the attractiveness of Vietnamese stocks, as well as the possibility of being promoted to Emerging Market soon, which will attract foreign capital, but in reality, the opposite is happening. Vietnam has been a market with strong net sales in 4/5 recent years, with the largest selling rate in the region when calculated based on capitalization or total value held by foreign investors.
According to SGI Capital, the valuation of Vietnam’s stock market is not more attractive than other markets, although the majority of capitalization belongs to groups with high cyclical risks such as banking, finance and real estate. Therefore, the expectation of foreign capital returning to net buying in 2025 will be difficult to achieve if valuations are not cheap enough and exchange rate risks still exist.
From a more optimistic perspective, experts from SSI Securities Company believe that capital flows from investment funds into the Vietnamese market will still be affected by many conflicting factors in 2025. Accordingly, capital flows will be limited by expectations of a slow rate cut by the Fed and exchange rate pressure, unpredictable policies under US President Donald Trump's term or potential economic recession, or the number of stocks in industries that attract cash flows such as technology is quite limited.
SSI experts expect that foreign investors will return to the Vietnamese market in 2025 due to the story of FTSE Russell's upgrade to emerging market status. Stepping stones such as the implementation of the KRX trading system, the application of the amended Securities Law and the amended Decree 155/2020 will create a premise for the development of the capital market in the medium and long term.
Regarding the net selling pressure of foreign investors, experts from VPBankS Securities Company commented that it will have a big impact in the short term, but not too risky because it is not spread out. After a strong net selling period in 2024, the net selling momentum in early 2025 is also affected by the general trend in emerging and frontier markets.
However, experts say that investors are too used to net selling, so the impact on psychology will not be too great. When the tariff "storm" gradually subsides and passes, the net buying trend may return. If investors see investment opportunities, the net selling trend will only be a reference factor. In fact, in the recent period, many stocks were not even affected but also benefited from tariffs, such as the mineral and public investment groups.
