VietNamNet Bridge - Many foreign investors have withdrawn their capital from Vietnam. The tendency will continue in the time to come, until December at least, analysts say.

The fact that the US FED has left the possibility of raising the prime interest rate in 2015 open has had negative impact on foreign investors. 

Meanwhile, the tardiness in issuing a circular that guides the implementation of Decree No 60 on offering more room in Vietnamese businesses to foreign investors has also discouraged investors.

A report showed that the foreign investors’ net sales in September totaled VND989 billion, the highest one-month net sales this year.

Analysts have every reason to worry that the indexes of the Vietnamese stock market would be affected by foreign investors’ massive sale from now to the end of the year.

With what the FED has stated, it is highly possible that the prime interest rate would go up by the year-end or early 2016.

Investors are still pessimistic, even though TPP negotiations have wrapped up. TPP ratification will still depend on the legislative bodies in TPP member countries. 

It would take the governments six to nine months to have TPP ratified by legislative bodies. It would also take the government of Vietnam time to have TPP ratified as there are only two National Assembly sessions every year. 

It is highly possible that TPP would be submitted to the National Assembly at the May 2016 session. 

As such, TPP will not be valid at least until the second half of 2016. This means that tariff cuts will not occur until that time or later.

In principle, any tax cut will affect investors’ decisions, both in direct and portfolio investments.

Analysts believe that foreign capital outflow from Vietnam would continue in the time to come, until December at least.

However, they said they still can see factors which can have positive impact on the Vietnamese market. The figures on GDP growth, consumption, investment and trade prospects are better than initially forecast. 

Meanwhile, Vietnamese stocks are believed to be undervalued, and therefore, are attractive to foreign investors.

While foreign investors have sold some stocks, they have bought other stocks in large quantities. 40.5 million MBB shares were transferred on October 8 alone. 

This occurred after MBB issued 40.58 million ESOP shares, and issued shares to specific investors in September 2015. 

To date, the portion or stake for foreign investors in MBB has been filled, with share sales now at VND643.7 billion.

NCDT