Vietnam's stock market suffered the biggest monthly fall in the world in April (Photo: VNA)Hanoi (VNS/VNA) - Local investors are concerned with recent increases in net selling byforeign traders, fearing a capital flight, but experts have tried to calm themarket with positive recommendations.
Vietnam's stock market suffered the biggest monthly fall in the world inApril, with the VN-Index on the HCM Stock Exchange losing 12.2 percent and theHNX-Index on the Hanoi Stock Exchange sliding 9.4 percent.
The market has moved within a narrow range in early sessions in May.
Alongside slumps of large-cap stocks, especially in the banking, securities andreal estate sectors due to heavy profit-taking pressure (the benchmark VN-Indexhit the all-time record high of nearly 1,200 points on April 6), a long netselling streak by foreign investors negatively affected the market.
On the main bourse in HCM City, foreign traders were net buyers of total 1.6trillion VND (70.6 million USD) in April, but if excluding the unexpected net buyvalue of over 3.1 trillion VND on April 20, foreigners were net sellers of about 1.5 trillion VND.
Their net selling streak extended to May with a total net sale value of almost 2.6 trillion VND till May 9.
Statistics have shown that the market usually falls when foreign investorsincrease net selling, so the current state of foreign trade has ignited fearsof a possible downtrend.
However, market insiders have forecast foreign net sells will likely end soon.
According to Cao Minh Hoang, investment director at IPA Securities FundManagement Company, foreign investors are restructuring their portfolios. Forthe last 10 years, each time foreign investors rearrange portfolios, the marketsuffers volatility and this provides a chance for them to disburse next-phaseinvestment.
“I think Vitenam's securities market is still outperforming other marketsat the moment,” Hoang was quoted as saying to financialwebsite nhipsongkinhte.vn.
Meanwhile, Duong Van Chung, director at MB Securities C’s northern area,reckoned foreign investors may be raising capital to prepare for big deals likeshare sales of Techcombank and Vinhomes.
Besides, many foreign traders are speculative investors like exchange-tradedfunds (ETFs) who usually have quick response to international fluctuations suchas Fed’s interest hike, he said.
Nguyen The Minh, head of analysis at Yuanta Securities Vietnam Co, said currentnet sells by foreign investors was partly affected by short-term concerns suchas possible exchange rate hike under pressure of strengthening of the US dollaras well as political risks like the US-China trade spat.
However, according to him, foreign moves were not a worry at this time as Vietnam's macroeconomic situation remained stable and overall foreigninvestor sentiment is still optimistic about the local medium- and long-termmarket outlook.-VNA
VNA
