As the benchmark Vn-Index is on track to reach the new height of 1,300 points in short-term, domestic capital inflows would serve as a major driver for growth.
Foreign investors maintaining their status as net seller for the past few months has not had significant impact to the stock market’s performance as in previous years, according to Bao Viet Securities Company (BVSC).
|Investors at a securities center in Hanoi. Photo: Cong Hung|
As of April 9, foreign investors net sold a total of VND11.45 trillion (US$496 million) on the stock market, of which over VND11 trillion (US$476.43 million) was on the Ho Chi Minh City Stock Exchange (HoSE), home to the majority of large-caps.
“While the amount remains large, the level of influence from foreign investors to the market’s prospect is limited,” stated the BVSC, referring to the low ratio of its selling value to the total of transaction value at 8.5% year-to-date.
Such rate is significantly lower than the 11.8% recorded in 2019 or 10.6% in 2020, it added.
The BVSC attributed the outflow of foreign capital to the restructuring of investment portfolios, however, in long-term, “Vietnam continues to be an attractive market thanks to stable economic-political environment, good price to earnings (P/E) ratio, and expectation for soon market upgrade,” stated the securities firm, expecting foreign investors to soon return as net buyer.
In the meantime, as the benchmark Vn-Index is on track to reach the new height of 1,300 points in short-term, the report suggested domestic capital inflows would be the major driving forces, especially as other domestic investment channels continue to stand idle and the low-interest rate environment as a result of the State Bank of Vietnam (SBV)’ polices continues.
On the same view, SSI Securities Corporation (SSI) expected the stock market to keep its upward trend, due to the low risk of inflation, positive performance of the banking sector in the first quarter, and the strong economic recovery.
“The target of 1,350-1,400 is entirely feasible in the coming time,” stated the SSI.