According to the General Statistics Office, although the stock market experienced strong volatility in the first six months of this year, foreign indirect investment (FII) value increased sharply by 82.4 percent, reaching 4.1 billion USD.— (Photo: tapchitaichinh.vn) Hanoi (VNS/VNA) - Although the direction of foreign capital inflow isbecoming increasingly unpredictable due to many external factors, experts saidthat Vietnam is still an attractive destination for foreign investors.
According to the General Statistics Office,although the stock market experienced strong volatility in the first six monthsof this year, foreign indirect investment (FII) value increased sharply by 82.4percent, reaching 4.1 billion USD.
Leaders of securities companies said that thiswas a positive signal for the Vietnamese stock market as this period witnesseda wave of foreign investors’ capital withdrawal from emerging markets to shifttowards the US market due to the increasing attractiveness of the US dollar.
According to Bloomberg, in the firsthalf of 2018, more than 19 billion USD in foreign capital was withdrawn fromemerging markets in Asia.
It should be some consolation, experts said,that Vietnam faced a somewhat better situation than its counterparts such asIndonesia, Thailand and the Philippines.
Dominic Scriven, Chairman of Dragon Capital,quoted a recent survey indicating that in the first half of this year, foreigninvestors withdrew 5.6 billion USD from the Thai market, 3.7 billion USD fromIndonesia and 1.6 billion USD from the Philippines.
Meanwhile, according to data from VietcombankSecurities Company (VCBS), foreign investors still net bought nearly 1.5billion USD on the Vietnamese stock market.
According to VCBS, regardless of the generalwithdrawal trend of foreign capital in emerging markets, cash flow fromcountries such as Japan and the Republic of Korea into Vietnam was stilltrending upwards.
The price to earnings (P/E) ratio of theVietnamese securities market has increased to 16.6 times, the highest since2008, and is no longer cheap in comparison with other regional markets.According to Viet Dragon Securities (VDSC), the market is becoming moreattractive, promising to open up better buying opportunities for investors.
Nguyen The Minh, head of analysis at YuantaSecurities Vietnam Co, said it was the quarterly portfolio reviews ofexchange-traded funds (ETFs) in Vietnam that forced investors to sell stocks torestructure their investment category.
Sharing the same view, Hoang Viet Phuong, SeniorDirector of Institutional Research & Investment Advisory at SaigonSecurities Inc. (SSI) said that the movement of foreign capital flow was a strategicissue relating to investment organisation.
Steady economic growth and political stabilityare considered by analysts as advantages that make Vietnam an attractiveinvestment destination. However, Vietnam’s stock market still faces manyexternal risks.
In the third quarter of 2018, the escalating globaltrade war plus the US Federal Reserves (Fed)’s interest rate hike have made theemerging stock markets less attractive.
The market has been also bearing the burden ofthe massive net selling by foreign investors in response to the appreciation ofthe US dollar against other currencies after the Fed raised interest rates.
Although the trading value of foreign investorsonly accounted for 15 to 18 percent of the total Vietnamese stock market’strading value, any movement in foreign capital flow would have a great impacton local investors’ psychology, especially in the context of emerging newexternal risks.
In the short term, according to SSI, exchangerate movements are important factors that investors need to follow as it islikely to affect the growth prospects of listed companies.
According to experts, thanks to these variousrisks, it will be difficult to predict which sector will lead the market. It islikely that some individual large-cap stocks with good business performancewill be the drivers of the market, attracting foreign traders.
In particular, foreign investors will also focusmore on IPO deals and capital divestments at large State-ownedenterprises.-VNS/VNA
According to the General Statistics Office,although the stock market experienced strong volatility in the first six monthsof this year, foreign indirect investment (FII) value increased sharply by 82.4percent, reaching 4.1 billion USD.
Leaders of securities companies said that thiswas a positive signal for the Vietnamese stock market as this period witnesseda wave of foreign investors’ capital withdrawal from emerging markets to shifttowards the US market due to the increasing attractiveness of the US dollar.
According to Bloomberg, in the firsthalf of 2018, more than 19 billion USD in foreign capital was withdrawn fromemerging markets in Asia.
It should be some consolation, experts said,that Vietnam faced a somewhat better situation than its counterparts such asIndonesia, Thailand and the Philippines.
Dominic Scriven, Chairman of Dragon Capital,quoted a recent survey indicating that in the first half of this year, foreigninvestors withdrew 5.6 billion USD from the Thai market, 3.7 billion USD fromIndonesia and 1.6 billion USD from the Philippines.
Meanwhile, according to data from VietcombankSecurities Company (VCBS), foreign investors still net bought nearly 1.5billion USD on the Vietnamese stock market.
According to VCBS, regardless of the generalwithdrawal trend of foreign capital in emerging markets, cash flow fromcountries such as Japan and the Republic of Korea into Vietnam was stilltrending upwards.
The price to earnings (P/E) ratio of theVietnamese securities market has increased to 16.6 times, the highest since2008, and is no longer cheap in comparison with other regional markets.According to Viet Dragon Securities (VDSC), the market is becoming moreattractive, promising to open up better buying opportunities for investors.
Nguyen The Minh, head of analysis at YuantaSecurities Vietnam Co, said it was the quarterly portfolio reviews ofexchange-traded funds (ETFs) in Vietnam that forced investors to sell stocks torestructure their investment category.
Sharing the same view, Hoang Viet Phuong, SeniorDirector of Institutional Research & Investment Advisory at SaigonSecurities Inc. (SSI) said that the movement of foreign capital flow was a strategicissue relating to investment organisation.
Steady economic growth and political stabilityare considered by analysts as advantages that make Vietnam an attractiveinvestment destination. However, Vietnam’s stock market still faces manyexternal risks.
In the third quarter of 2018, the escalating globaltrade war plus the US Federal Reserves (Fed)’s interest rate hike have made theemerging stock markets less attractive.
The market has been also bearing the burden ofthe massive net selling by foreign investors in response to the appreciation ofthe US dollar against other currencies after the Fed raised interest rates.
Although the trading value of foreign investorsonly accounted for 15 to 18 percent of the total Vietnamese stock market’strading value, any movement in foreign capital flow would have a great impacton local investors’ psychology, especially in the context of emerging newexternal risks.
In the short term, according to SSI, exchangerate movements are important factors that investors need to follow as it islikely to affect the growth prospects of listed companies.
According to experts, thanks to these variousrisks, it will be difficult to predict which sector will lead the market. It islikely that some individual large-cap stocks with good business performancewill be the drivers of the market, attracting foreign traders.
In particular, foreign investors will also focusmore on IPO deals and capital divestments at large State-ownedenterprises.-VNS/VNA
VNA
