VietNamNet Bridge - The continued net sales by foreign investors has raised big concerns. However, experts have said the net sales would end by June.

A report found that foreign investors had sold more securities than bought by VND1.6 trillion by February 2016. If they continue selling Vietnamese stocks, the figure may reach VND2-3 trillion by the end of June.

According to Yun Hang Jin, analysis director of Korea Investment & Securities, there are two reasons for foreign investors to sell more than buy.

First, as the stock prices fluctuate, investors try to sell securities to make profits. 

Second, the US FED in late December 2015 raised the prime interest rate, but is cautious when mentioning the next interest rate adjustments.

The continued net sales by foreign investors has raised big concerns. However, experts have said the net sales would end by June.

Meanwhile, economists predicted that FED may raise the prime interest rate in June and December. This has prompted investors to withdraw capital from markets to avoid risks.

Besides, the depreciation of the Chinese yuan has also affected the dong value and the Vietnamese stock market. At the HCM City Stock Exchange, a report showed investors’ net sales had totaled VND4.2 trillion by August 2015.

However, Jin believes that the net sale would only continue until the end of the second quarter before it is replaced by the net purchase.

Foreign investors are expected to come back in June when the world’s economy gets less tense and the worry about risk eases. The possible changes in the policies in Vietnam after the National Assembly election are believed to have positive impacts on the stock market.

When foreign investors shift to buy more than sell, experts say, the capital flow into the stock market would increase slightly, while the disbursement in Vietnam is believed to be a little higher than other emerging markets. 

Kim Eng Securities Company noted that they can see signs of investors beginning to purchase more than sell in the last two weeks. This can be seen as an indicator showing foreign investors’ confidence in the Vietnamese market.

It said if the 580 point area is successfully conquered, the VN Index would head for the new goal – the 610 point area.

Saigon Securities Incorporated (SSI) says it sees an upward trend in the medium term. The market in the second half of March would be supported by the good news that the FED still does not plan to raise the prime interest rate and that listed companies would release their business plans at shareholders’ meetings.

SSI predicted the VN Index would be around 575-580 points.

Bloomberg has quoted Barry Weisblatt of Viet Capital Securities as predicting that the VN Index may reach 680 points by the end of the year.

Vietnam targets 7 percent GDP growth rate this year.


DNSG