VietNamNet Bridge - More than VND33.5 trillion ($1.4 billion) worth of foreign portfolio investment (FPI) in both stocks and bonds were poured into Vietnam in the last three quarters of the year. 

This has increased the dollar supply and helped the State Bank improve forex reserves.

Analysts said the Vietnamese stock market in the third quarter had two major development stages. In the first stage, which ended in mid-August, the VN Index fluctuated with alternate up/down trading sessions.

In the second stage, the upward trend bounced back to the new peak of over 800 points thanks to a group of shares with high capitalization value such as SAB, VIC, MSN and GAS.

The VN Index increased by 3.6 percent, but the trading value decreased in Q3. 

More than VND33.5 trillion ($1.4 billion) worth of foreign portfolio investment (FPI) in both stocks and bonds were poured into Vietnam in the last three quarters of the year.

A report from Bao Viet Securities showed that the highest growth rate belonged to shares of brewery companies (+28.8 percent), SAB of Sabeco and BHN of Habeco. They both saw sharp increases in prices thanks to good business performance and the government’s divestment of its stake.

The shares of the companies which have invested in many business fields saw the second strongest growth (+23 percent), thanks to MSN, the share with the highest capitalization value in its field. The other shares in the same field did not see considerable improvement.

Similarly, the high growth rates of tourism shares (+18.5 percent) and infrastructure shares (+15.5 percent) were obtained mainly thanks to the surge in leading shares such as HPG, VJC and ROS.

Meanwhile, the shares of rubber companies have dropped dramatically by 24.5 percent because of unsatisfactory business results of DRC, CSM and SRC and stiff competition in the industry.

The net purchase by foreign investors also helped the Vietnamese stock market grow rapidly in the first nine months of the year. Following the net purchase in the first two quarters, foreign investors continued to be net buyers in the third quarter. 

On HSX, they bought VND28.6 trillion worth of stocks and sold VND23.8 trillion which meant the net purchase value of VND4.8 trillion.

FPI flow supports exchange rate

Since June 2017, the State Bank has pumped a huge amount of dong, roughly VND68 trillion, to buy $3 billion.

The latest updated report showed that Vietnam’s forex reserves have reached $45 billion, or $6 billion higher than the end of 2016. This is the biggest level ever reported so far.

State Bank’s Deputy Governor Nguyen Thi Hong, when answering Bloomberg, said the dong/dollar exchange rate would be stable towards the end of the year thanks to plentiful reserves. 

She said with improved forex reserves, the central bank will have better resources to intervene in the market if necessary.

RELATED NEWS

The financial picture of Vietnam's 10 largest banks

How can Vietnamese transfer USD abroad to pay for house purchases?

Thanh Mai