Over the past few years, the Vietnamese market has attracted strong capital thanks to the stable macro factors as well as the expectation of the market upgrade story. However, at the moment, global funds are also facing many difficulties after the Covid-19 event, so there will be a lot of consideration in increasing investment in markets like Vietnam.
In the FiinTrade 2 program with the theme of stock prospects and opportunities in the late 2020 period, securities experts have made comments on cash flow into the market.
According to expert Dao Phuc Tuong, Vietnam is an attractive destination in the region with the Frontier Markets group in the past 20 years, as well as the next 10 to 15 years. However, in the next few years, demographic factors may be a risk that investors should pay attention to.
Although Vietnam’s stock market attracts foreign capital flows quite well, the pressure to withdraw when there are events like the last Covid-19 period is not small. Statistics show that foreign investors have net withdrawn about 20 trillion dong from the beginning of the year until now (eliminating the transaction of buying VHM agreement). Foreign investors withdraw mainly from ETFs as well as Global Funds.
Mr. Tuong said that there are two factors that cause foreign investors to withdraw money: (1) They withdraw to solve internal problems in the country, as well as their businesses and (2) funds reassessment of risks. in the Vietnamese market in the context of other declines.
According to this expert, in the past few years, the Vietnamese market has attracted strong capital thanks to the stable macro factor as well as the expectation of the market upgrade story. However, at the moment, global funds are also facing many difficulties after the Covid-19 event, so there will be a lot of consideration in increasing investment in markets like Vietnam.
Foreign cash flows into the market at the end of the year can be expected from Frontier Markets group in case Vietnam increases the proportion in this basket. In addition, there may appear a number of “deals” such as the investment funds in VinGroup and Masan groups in the past period. Mr. Tuong said that this cash flow may have a little positive impact on the market, but it is not too clear and it is difficult for individual investors to benefit directly.
Regarding domestic cash flow, Mr. Nguyen Duc Hung Linh – Investment Director of PVIAM said that it is difficult to expect cash flow from investors to pour into the market in August, even in the context of falling interest rates. Low interest rates will be difficult to attract people who do not have much expertise to pour money into stocks and if there are not many.
Mr. Linh also assessed that the strong recovery of the market in the past period made the valuation ground no longer cheap and difficult to stimulate new investors to join as before. The market now lacks a spark to attract cash flow, lacks from policy to breakthrough factor from within the business.
In general, Mr. Dao Phuc Tuong said that the decrease of interest rate level will not help the market increase. The too low interest rate level also shows that businesses are still facing many difficulties and only the stocks of enterprises with strong fundamentals and stable dividend payments are attractive enough for investors.