Foreign investment funds plan to pour money into Vietnamese stocks

Quan Duc Hoang, chairman of A+ Fund, made the comments about foreign capital at the roundtable 'New Investments amid New Volatility' hosted by VIR at its headquarters in Hanoi on February 7.

“Recently, I have business trips to work with big investment funds in the United States, the United Kingdom, and South Korea. Not one of these investment funds have a sensitive overview of the Vietnamese investment environment. They estimate that it is an ideal time for investors to collect a portfolio of shares,” Hoang said. “In spite of the difficult situation, during the past nearly 30 years, I have yet to see a large investment opportunity similar to the current situation because many Vietnamese enterprises are operating smoothly and generating good profits. Besides, we have yet to take thorough advantage of the opportunity from free trade agreements, especially EVFTA. The important note is that the investors need to be careful in selecting partners.”

Hoang added that although many large investment funds want to pour money into the Vietnamese stock market, they have yet to implement their plans because they have yet to select big enough partners. Meanwhile, large domestic enterprises run out of room for foreign investors.

In the framework of the roundtable, the business community and individual investors had opportunities to listen to specific analyses about the fresh environment from experts and lawyers in banking, finance, real estate, and blockchain, and from there have more of a basis for their investment decisions.

A study by BIDV Securities Company analysing over $50 billion owned by foreign investors on the Vietnamese stock market showed that more than half of foreign ownership is owned by strategic investors. This group usually holds stocks for the long term.

Foreign investors also expect Vietnam’s market to be upgraded to an emerging market. According to JPMorgan's CEO in the Asia-Pacific region, if it is upgraded to emerging market status, the market will receive approximately $5 billion from ETFs. Therefore, the fact that the market is in a period of low valuation is a very good opportunity to invest and hold.

From being net sellers in the first nine months of 2022, foreign investors have become the driving force supporting the Vietnamese stock market in the last few months, and the inflows are expected to continue this year.

The market's uptrend in the near future may slow down and the risk of correction is increasing, brokerage said.

The loss of heat in stock transactions has significantly diminished the revenue figures from brokerage and margin loan services for securities firms, further exacerbating competition between them.

The prospect of economic growth and market upgradation is the driving force to attract cash flow into the stock market.