Foreign investors were net sellers, Vietnamese market is still attractive

Foreign investors were net sellers, Vietnamese market is still attractive

Foreign investors have net sold more than 11,000 billion in the first 3 months of 2021.

Foreign investors were net sellers

According to VNDirect, looking at the longer picture in the last 3 years, since the beginning of 2018, it can be seen that the foreign block has continuously sold net, and the accumulated net selling value through order matching transactions is up to VND 66 trillion. In return, the cash flow of foreign blocks is purchased net through large lots of agreements, concentrated mainly in blue chips codes with a value of over VND 100 trillion. Net purchases through deal trading help foreign cash flow still flow net into the stock market since 2018, with a value of over VND 40 trillion.

However, if only from the beginning of 2021 to the end of April 9, 2021, foreign investors net sold a total of 11,456 billion dong on all 3 exchanges HSX, HNX and UPCOM. In which, foreign investors net sold nearly 21 trillion dong through matching order but net bought over 9.5 trillion dong through put-through trading. On the HSX alone, foreign investors net sold 11,033 billion VND, of which net sold 20,589 billion VND through matching order but net bought 8,425 billion VND through agreement form.

Strong net foreign sales in recent years come from many reasons, which can be foreign blocs performing portfolio restructuring between markets, countries and between stock groups, taking profits after many stocks have increased their prices beyond the top … But in terms of long-term vision, BVSC believes that the Vietnamese market is still very attractive with the motivations from the stability of the political economy, attractive prices, upgrade expectations, these soon attract foreign blocs back to net purchases.

Notably, the net selling value of foreign investors in the first months of 2021 was large in absolute value, but the influence of foreign investors on the market movement was not large due to the proportion of buying and selling value. / transaction value matched at low level.

In 2021 alone, the proportion of foreign investors’ selling value is only 8.5%, much lower than the rate of 11.8% in 2019 or and 10.6% in 2020. The market is thanks to domestic cash flow, because new money flows into the market when other investment channels are frozen, lacking in attractiveness.

Besides, despite strong net selling on all 3 exchanges in the first quarter of the year, foreign investors net bought through ETFs. ETFs listed abroad have quite positive trading in the first 3 months of the year. VanEck and X-tracker FTSE Vietnam ETF were both net buyers with net buying of VND 395 billion and VND 594 billion, respectively. Only Ishare fund saw a slight net selling of 34 billion dong.

As for the domestic ETFs listed in the country, most of the funds are net bought with large value. VFMVN Diamond ETF is at the top with a net buying of 3,463 billion dong. Following were VFMVN30 and SSIAM VNFin Lead with net buying value of VND 682 billion and VND 585 billion, respectively. Although MAFM Vn30 Fund has just come into operation, it also attracts foreign investors with a net buying of more than 16 billion dong.

Attractive market valuation

Compared to the development of VnIndex in the past, VnIndex’s P/E is now higher than the 5-year average. However, as observed by VNDirect experts, at the current P/E level, the probability of the market decreasing after cutting up on the upper boundary of the +/-1 tecticance range is not high. In addition, with the recovery of the economy, VNDirect’s profit forecast of listed enterprises will grow by 27.3% in 2021 (compared to 2020). With the profit growth of listed enterprises, VnIndex’s P/E will likely decrease to 15 times this is lower than VnIndex’s 5-year sliding average – 16.41 and still gaining attractiveness.

Rated to be more attractive than other markets in the region, but it is very necessary to attract foreign capital, connect with the flow of investment in the world to the valuation ground of Vietnamese stocks. in general terms. Up to now, the market liquidity and the ETFs participating in the market have also contributed to help the Vietnamese market’s valuation ground closer to other markets in the world.

As of April 9, 2021, compared to the sample of 12 markets observed by VNDirect experts including frontier, emerging and developed countries, VnIndex’s P / E is currently at 19.11. – the 4th low among 13 markets assessed by VNDirect and only higher than the P / E of the Shanghai Index (17.61) of China, the Hang Seng (14.86) of Hong Kong and the KOSPI (12.99) of Korea. These are also 3 markets with a sharp decrease of more than 10%, in the past February and March.

Meanwhile, the rate of return on equity of the companies listed on the HSX stock exchange was at the highest level among the markets monitored by VNDirect. This shows that, in general, with high return on equity, stocks in the stock basket of VnIndex are being traded at price ranges.

Source: – Translated by

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