Before the day FTSE Russell announced the results of its semi-annual review, foreign investors disbursed in a trickle, while the discharge value remained around VND 2,000 billion per session.
Foreign investors today poured nearly 1,100 billion VND into the Vietnamese market, focusing on industry-leading codes such as HPG, VNM, PNJ, VIX and TCB. This is the lowest disbursement level in the past month and a half. On the contrary, this group sold more than 1,800 billion VND, thereby extending the net withdrawal for 5 consecutive sessions.
From the beginning of the month until now, foreign investors have sold a net of VND 1,400 billion. According to statistics from VPBank Securities Company, this group withdrew a total of VND 76,000 billion since the beginning of the year. The wave of capital withdrawal in Vietnam is similar to Asian markets, mainly because of increased inflationary pressure due to Middle East tensions and high US government bond yields, so investors are shifting capital flows.
Foreign investors remain cautious during the period when Vietnamese stocks are before the milestone of moving from the frontier group to second emerging according to FTSE Russell's criteria. This organization will announce the official list of the semi-annual review on August 21 and take effect one month later. Domestic securities companies predict that 27-30 Vietnamese stocks will be eligible to be included in the index basket.
"This is the period when active capital flows are often one step ahead to anticipate forced buying from index funds," the analysis team of Tien Phong Securities Company (TPS) stated their opinion. This is expected to help foreign investors' trading trend soon reverse from next week.
Foreign investors' caution spread to domestic investors. VN-Index therefore decreased more than 5 points, losing the 1,730 point mark. Red covered the Ho Chi Minh City floor with more than 210 codes closing below reference, double the number of gainers. The large-cap basket was highly differentiated with 20 stocks falling, nearly 3 times the number of stocks rising.
In the banking group, key stocks such as VCB, CTG, BID, STB... all decreased by more than 0.5%. LPB, TPB and ACB are rare representatives going upstream, accumulating about 1% compared to the reference.
Selling pressure also weighed on securities stocks. Industry leading codes such as SSI, VND, HCM, TCX, VCI, VIX all dropped.
In the real estate group, CII was the only code that increased. Most stocks of investors such as Nam Long, Khang Dien, Phat Dat, Quoc Cuong Gia Lai... decreased by more than 1%.
Market liquidity continued to remain at a low level, reaching less than 15,000 billion VND. VIC contributed more than 1,000 billion VND, far ahead of following codes such as SHB, STB, and VIX.
In the coming sessions, the market is forecast to drop to 1,700 points, which is an additional 25-30 points lower than the current level. According to many analysis groups, valuations around this area are relatively reasonable when excluding the Vingroup group. P/E (market price over profit per share) is about 10.35 times and P/B (market price over book value) is about 1.61 times.
"Investors should maintain a reasonable portfolio proportion and focus on industry-leading stocks with solid fundamentals, in strategic sectors of the economy," the analysis team of Saigon - Hanoi Securities Company (SHS) recommended.
