The Vietnamese stock market just had an impressive August.The VN-Index has increased by more than 600 points since the bottom of April, without any correction of more than 5%.
In addition to the VN-Index soaring to nearly reach 1,700 points, market liquidity also confirmed a record high month with many matched trading sessions over VND50,000 billion, even matched sessions of VND60,000 - 70,000 billion.
However, contrary to the active domestic capital flow, foreign investors' transactions have returned to the net selling trend, with the record largest number ever. In August 2025, foreign investors net sold more than 862 million units, with a total net selling value of more than VND 42,718 billion.
According to many experts, the phenomenon of foreign investors 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.
The stock market entering September is expected to face more pressure. Firstly, profit-taking pressure has increased after a series of strong increases in recent days. Second, the restructuring of ETF portfolios. Third, investors' cautious sentiment before the third quarter business results announcement season. Fourth, macro variables from the outside (geopolitical fluctuations in some regions, Fed monetary policy...).
A key factor to monitor is the ability to upgrade the stock market from a frontier market to an emerging market. There are many expectations that Vietnam will be upgraded by FTSE Russell in the September review. If this is realized, the Vietnamese stock market can attract large-scale foreign capital flows, both helping to improve market liquidity and raising stock valuations. However, this event may also cause market fluctuations in the short term when funds restructure their portfolios.
Dr. Nguyen Duy Phuong, Investment Strategy Director of DG Capital, said that if the Vietnamese stock market is upgraded to emerging market status, large-cap banking groups will become the main destination for foreign capital, both because of their high proportion in the index basket and thanks to a solid foundation.
"Credit is forecast to grow strongly in 2025, bad debt has reached its peak, asset quality has improved, so the valuation will be raised higher. Currently, the P/B valuation of some bank stocks is still at an attractive level, creating room for price increase in the coming time", Dr. Phuong stated his opinion.
