VietNamNet Bridge – Although foreign buying value hit an eight-month high in November, securities enterprises said that the investors have yet to come back to the local market given risk concerns.

Last month, foreign buying value stood at over VND3.2 trillion on the Hochiminh Stock Exchange (HOSE) while their selling value was VND1.8 trillion. However, large transactions of Vingroup Company (VIC) in the final days of the month soared to over VND1 trillion.

If VIC transactions were netted off, foreigners were net buyers to the tune of just VND338 billion, which was equivalent to previous months.

VIC on November 30 announced that South Hanoi Urban Development Joint Stock Company and Vietnam Investment Group Joint Stock Company completed block deals of eight million and 5.4 million VIC shares respectively. These trades were pre-registered with the southern stock watchdog a couple of days ago with the total value of over VND1 trillion.

Trinh Hoai Giang, deputy general director of HCMC Securities Corp. (HSC), said that not many new investors have joined the market as only 38 foreign accounts, both individual and institutional, were registered at the Vietnam Securities Depository in November. HSC, who takes the lead in terms of foreign brokerage market share, saw no new investors.

Having met many foreign investors, Giang said they are interested in the local stock market but hesitant to put money on the playground at the moment. Their confidence in an improvement of the local economy has faded since August.

Next year will remain tough as the Government is still struggling with bad debts and inflation while the stock market will need a lot of time to recover after restructuring. “Foreign investors recently have come back to the bond market but focused on short-term bonds from two to three years only. They are concerned that inflation will recur in the country after these terms,” Giang said.

Foreigners will continue to keep a ‘wait-and-see’ attitude and will inject money on the market when the economy plunges to the floor. However, consumer goods and food sectors will remain attractive with shares of Vinamilk (VNM) or An Giang Plant Protection Company being targets of investment organizations.

Dinh Quang Hoan from Viet Capital Securities Company also shared the same view, saying that over 10 mergers and acquisitions deals under this broker’s consultancy this year aims at consumer goods sector. Other industries, meanwhile, see no notable signs.

Another expert said that many foreign funds given fund closing pressure will sell out a large volume of shares next year. They will not set eyes on the local stock market if they have yet to find out new capital sources.

Source: SGT