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Foreign capital flow unpredictable

VietNamNet Bridge - Foreign investors have been selling more than buying in the Vietnamese stock market. However, analysts still believe the foreign capital inflow to Vietnam will increase in 2016. 
VietNamNet Bridge - Foreign investors have been selling more than buying in the Vietnamese stock market. However, analysts still believe the foreign capital inflow to Vietnam will increase in 2016. 


Lao Dong cited statistics as reporting that from August 2015 to February 2016, foreign investors sold a net total of 7 million securities, worth VND4.1 trillion. 

Selling more than buying was still the major tendency in the first two months of 2016. In January, foreign investors’ net sale reached VND1.2 trillion, while the figure was VND200 billion in February.

Though foreign investors bought more than sold in the first week of March, no one can say for sure they would continue in the next one or two months.

Yun Hang Jin from KIS, a securities company, commented that the move by FED has affected international investors’ moves in the world and in Vietnam as an emerging market.

From August 2015 to February 2016, foreign investors sold a net total of 7 million securities, worth VND4.1 trillion.

The State Securities Commission (SSC) estimated that roughly $540 billion was of capital was withdrawn by investors from emerging markets in 2015. The figure would be $1 trillion for both 2014 and 2015.

The expert from KIS said it is highly possible that FED would raise the prime interest rate two more times in 2016, in June and December, by 50 percentage points. The interest rate increase would make the US dollar stronger, which would prompt international investors to give up assets with high risks.

As such, foreign investors would still sell more than buy in emerging markets, including Vietnam.

However, he believes that the investors’ hesitancy would ease towards the year end, while they would buy stocks again later. 

He predicted that the Vietnamese stock market, after witnessing foreign investors’ net sale, would see capital inflow increasing slightly by the end of the second quarter.

Other analysts also are optimistic about the stock market performance, saying that the international capital flow would not have overly high influences to the domestic stock market.

The analysts said that the domestic market now has positive factors, including the loosened monetary policy and the implementation of the Decree 60 on lifting the foreign ownership ratio in Vietnamese businesses. 

And some new policies, such as the opening of the derivatives securities market and the day-trading regulations, would also have a positive impact on the bourse.

Deng Jiewen from FengHe Asia Fund has recently advised investors to inject money into Vietnamese securities.

The investor said he was optimistic about Vietnam’s economy and Vietnamese businesses’ profit growth.

In 2015, Kingsmead Asset Management from Singapore compared Vietnam with a bright star in the South East Asia’s dark sky. 

The GDP growth rate of 6.7 percent the government of Vietnam set in 2016 is one of the highest growth rates in the world.



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