Foreign investors affect Vietnam’s stock market

The falls in global stock markets in recent days have had a strong impact on Vietnam’s market with people selling shares. This has caused the VN-Index to drop more than 5% on Monday. Foreign investors are playing a significant role in driving the market.

When the VN-Index fell 29 points in trading yesterday, the stock assets of foreign investors fell by 720 million USD in just a day. But they are also bought shares worth of almost 9 million USD. Foreign investors bought stocks in oil and gas and banks.

Le Duc Khanh, Director of investment strategy, Maritime Corporation (MSI) said: "The market fell from 640 index points down to the threshold of 515 points. It fell more than 100 points. This price level is relatively attractive for investors with a longer vision, especially foreign investors."

Nguyen Ngoc Nam, Financial analyst: "Foreign investors analysed the stocks very carefully before they decided to buy them. They seem to see this drop in the Vietnamese stock market as an opportunity. Increasing demand from foreign investors was recorded today. They are waiting for the stocks drop to the lowest points to buy."

However, as of the end of today, foreign investors started to sell 1.5 million shares equivalent to 2.5 million USD.  Liquidity today reached 127 million USD with nearly 178 million shares traded.

Nguyen Ngoc Nam Financial analyst said: "I think foreign investors will continue to buy more shares. When that happens, Vietnamese investors will start to follow the buying trend. That will help the stock exchange market to recover. The impact of the foreign investors is forecast to be positive for the Vietnamese stock market."

Given the context of a complex financial situation occurring on a global scale, Vietnam’s ministry of Finance issued Circular 132 about relaxing the limit on shares held by foreign investors. This will help attract more investment from foreign investors, and contribute to the recovery of Vietnam's stock market in the future.