Selling by foreign investors prompts caution
Selling by foreign investors prompts caution
Six consecutive weeks of net share sales by foreign investors, worth more than VND1.1 trillion (US$52.1 million), have spooked the Vietnamese stock markets.
At the HCM City Stock Exchange, foreign investors were responsible for a combined net sale of VND1.031 trillion (nearly $49 million) during the week.
Most of their sales focused on leading shares that negatively affected VN-Index performance, such as PV Gas, PetroVietnam Drilling and Wells Service, Hoa Phat Group and VinGroup.
The benchmark VN-Index lost a cumulative 5.25 per cent to fall below 600 points, closing the week at 585.28 points. Meanwhile, the VN30, which tracks the top 30 shares by market value and liquidity, declined by 1.14 per cent to end last Friday at 651.72 points.
The investors also unloaded shares at the Ha Noi Stock Exchange, but the sales value of sold shares was modest, at VND71.7 billion ($3.4 million).
Nguyen Van Quy, analyst at FPT Securities Company, said the downward trend on global stock markets would likely undermine the role of foreign investors in the domestic market, particularly when they keep selling shares.
At the Ha Noi Stock Exchange, the HNX-Index was trimmed down by 3.11 per cent during the week, finishing last Friday at 87.64 points.
Rising caution also brought down liquidity at both exchanges.
Daily market volume at the HCM City market dropped by 23 per cent compared with that of the previous week, averaging nearly 132 million shares worth VND2.46 trillion ($116.6 million) per session.
In Ha Noi, the trading volume was down by nearly 10 per cent against the previous week, averaging 71.6 million shares worth nearly VND1.02 trillion ($48.2 million) per day.
However, long declines have brought the price range of many stocks to levels that were attractive to bargain-hunting investors. This cushioned the market on the week's last session.
"The current prive level becomes rather attractive. Accompanied by the third-quarter reporting season, many shares will likely recover and facilitate a short-term rebound," Quy said.
He mentioned blue chips which declined substantially during the past downtrend but could be the target of money inflows in the future.
"A recovery with the support of major stocks will be longer and more sustainable," Quy added.
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