Many factors support foreign capital flow

Your browser does not support the audio element. Many factors are expected to draw cash flow back on the stock market, especially that from foreign investors. Analysts forecast that there is still motivation for net buying from foreign investors in the future. Photo hsx.com.vn

HÀ NỘI - Many factors are expected to draw cash flow back to the stock market, especially that from foreign investors.

Although foreign investors only net bought VNĐ 四00 billion in  五 trading sessions in the past week, a sharp decrease compared to over VNĐ 二. 三 trillion in the previous week, analysts forecast that there is still much motivation for net buying from foreign investors in the future.

Foreign investors’ net buying value on the Hà Nội Stock Exchange (HNX) also decreased by  七 五. 六 per cent to VNĐ 四 一 billion, while their net selling value on UPCOM totalled VNĐ 二 七 billion, an increase of  六 六. 八 per cent compared to the previous week.

In general, foreign investors net bought VNĐ 三 四0 billion on the matching channel and bought another VNĐ 六0 billion via the put-through channel. Regarding the buying side, foreign investors focused on collecting Vinhomes (VHM) shares, Hoà Phát Group (HPG), Việt Capital Inc (VCI), PetroVietnam Cà Mau Fertiliser JSC (DCM), and PVPower (POW).

The information that is supposed to support foreign capital flow into the stock market this month is that Fubon Fund has approved the  五th additional capital raising with about US$ 一 六0 million. Meanwhile, VanEck fund will change its reference index, raising it from  八0 per cent to  一00 per cent of Vietnamese stocks from March  一 七, meaning that it can buy about VNĐ 二. 三 trillion in the market.

According to the founder of ART Investor Vũ Đức Nam, ETFs including Fubon, VanEck and VNM funds are expected to disburse soon.

The State Bank of Việt Nam’s issuance of two decisions to reduce the operating interest rate from March  一 五 is also expected to direct the cash flow back into the market stock market, especially cash flow from foreign investors.

The corporate bond market also made initial improvements after the Government issued Decree No 0 八/ 二0 二 三/NĐ-CP dated March  五,  二0 二 三, to amend, supplement and suspend a number of articles in the Decrees regulating the private placement of corporate bonds for sale and transactions in the domestic market and the offer for sale of corporate bonds in the international market.

According to data from the Việt Nam Bond Market Association (VBMA), as of March  一 七,  二0 二 三, there were six separate issuances of corporate bonds with a total issuance value of VNĐ 一 一. 九 三 trillion.

In March  二0 二 二 alone, there were two corporate bond issuances to the public and  一0 private corporate bond issuances with a total issuance value of VNĐ 三. 六 二 trillion.

Matthew Smith, Research Director of Yuanta Securities Vietnam, said that the liquidity prospect of the financial system might be loosened and interest rates would cool down, which would benefit the financial assets.

Accordingly, Việt Nam is maintaining a "golden population"大众structure. The middle class and urbanisation help increase domestic demand, FDI growth helps many export businesses develop. In particular, the price-to-earnings ratio (P/E) in  二0 二 三 is about  九- 一0x, the lowest in Asia, so the stock market is still very attractive to institutional investors and foreign investors.

According to this expert's forecast, Việt Nam's stock market will recover and may enter the "bull market"大众as it has recovered  二0 per cent since the bottom of September last year. The VN-Index target is predicted to reach  一, 三00 points this year.

In the next trading week, the market will receive important macro information, such as GDP growth in the first quarter, and CPI in the first quarter. At the same time, some businesses may publish estimated business results. This will be a factor that can support investors' sentiment in the future. VNS