Foreign buying on bourse to decline in H2: expert
Foreign buying on bourse to decline in H2: expert
Foreign investors are forecast to reduce buying on bourse in the second half of this year and their participation may not a positive factor for the local stock market like in the year’s first half, says an analyst of KIS Company.
Speaking at a workshop in HCMC on Monday, Yun Hang Jin, director of emerging market department of Korea Investment & Securities (KIS) Company, which holds a 49% stake in KIS Vietnam Securities Company, said that foreigners may maintain a balance between buying and selling in final months of this year. So, their trading would not create positive impacts on the market.
Yun said that as the U.S. government has an intention to wind down economic stimulus packages, international investors have been concerned about risky assets. Although the U.S. has yet to adopt this move, international investors have reacted to this, causing a tendency of capital withdrawal out of emerging markets.
Besides, they are also concerned about a slowdown in economic development in emerging markets. Vietnam has seen mild impact from foreign capital withdrawal while other nations have suffered strong influences.
In Indonesia, foreigners poured nearly US$2 billion into the equity market in the first five months of this year but net sold nearly US$2.3 billion in June alone. In Vietnam, the investors net bought US$249 million in the Jan-May period but net sold US$79 million in June.
Given impacts of the U.S. economy, the investors may delay establishment of new investment funds in Vietnam while active funds may start to sell. Strong foreign buying early this year may not occur in the second half of this year, Yun said.
As of the end of June, foreign holdings almost reached the record high, at 48% of the foreign ownership limit. Therefore, it is impossible that the investors may raise their holdings further, the expert said.
However, despite concerns over the ending of monetary accommodative program stateside, the VN-Index may only see mild correction. The local market still sees bright outlook in the next six months, Yun said.
The index is expected to move between 480 to 600 points from now to the end of this year compared to its range from 420 to 520 in the first six months.
The VN-Index’s holding on over 500 points in July will be an important factor. In long term, the downtrend since 2009 already ended in 2012 and the index is starting a new uptrend now, Yun added.
vietnamnet
