An investor watches stock indices on an electrical board. (Photo: VNA) Thai Thi Viet Trinh, an expert from SSI Securities Company, said that thecapital flow into the Vietnamese stock market in September continued to besignificantly influenced by the global trend.
Around the world, cash flow into financial assets continued to decline asinvestors reduced the proportion of risky assets in their portfolios. Marketsentiment did not improve in September, with major central banks such as the USand EU emphasising the pursuit of tight monetary policy with the central goalof controlling inflation, she said.
In September, foreign investors net sold on the Vietnamese stock market, with atotal value of 3.5 trillion VND (144.9 million USD), the highest level sinceMarch this year. Foreign capital flow had been less positive since the secondhalf of August, and was similar to the movements of foreign investors in theregion; except Indonesia, thanks to the advantage of exporting raw materials.As for nine months and excluding sudden transactions, foreign investors netbought 2.5 trillion VND.
Besides external risks, internal factors that have a negative impact on marketsentiment were becoming more obvious, such as slowing GDP growth or the StateBank’s continuing to raise interest rates to stabilise the exchange rateenvironment, said SSI Securities Co.
According to Petri Deryng, Founder and Director of PYN Elite Fund, there isstill demand to pour capital from investors in Thailand and other Asiancountries, but it is not significant. If the market is upgraded, foreigninvestors can participate more in Vietnam.
He said that the Vietnamese market would still remain promising next year andbe one of the most potential markets in the world. If the market is upgraded,more foreign investors could enter the market, which would be beneficial for themarket in the long run.
In terms of global investment cash flows, SSI maintained a cautious view on theallocation of capital flows to financial assets, especially to equity funds,until the Fed meeting in November.
Although stock prices have reached low levels, the sentiment ofthe market will only become more positive if inflation decreases continuously,while the Fed's monetary policy management becomes looser in nature.
At the moment, SSI had not observed a big change in market sentiment.Similarly, equity inflows into emerging markets would be strongly influenced bythe direction of the dollar, and there would be no breakthrough in inflows intoemerging market for the rest of this year.
Analysts of VNDirect Securities also said that in the context of the Fedsending signals that the interest rate hike cycle might not be over soon, cashmight still outflow from risky assets and markets; including the Vietnamesestock market.
Mirae Asset Vietnam Securities Company recommended investors be aware of pressuresfrom the world that may negatively affect the growth and stability of theVietnamese economy. In September, the USD/VND exchange rate increased byapproximately 1.9% compared to the previous month. These externalpressures might indirectly cause foreign investors to be net sellers in thenear future./.
VNA
