Customers at a branch of Saigon-Hanoi Bank (SHB) (Photo courtesy of SHB) According to data from the Ho Chi Minh Stock Exchange (HOSE), the totaltrading value of foreign investors accounted for more than 10.32%, much higherthan the 6-8% months ago when the market went down. This number can partlyexplain the anxiety of individual investors when the market slumped, but thecash flow of foreign investors became more dynamic in the past month.
Statistics show that in October, foreign investors net sold US$81 million onHOSE, however, if Eximbank (EIB)'s sudden put-through transaction is not takeninto account, foreign investors net purchased more than VNĐ2 trillion,according to SSI Securities Co.
The inflow of foreign capital in October came mostly from ETFs and activeinvestment funds in the market.
ETFs net bought about 41 million USD, mainly from Fubon FTSE Vietnam ETF (35million USD) and VanEck Vietnam ETF ($6 million). Year-to-date, netinflows from ETFs were 371 million USD, of which Fubon net bought 288 millionUSD, according to SSI.
“October is considered one of the successful months for ETFs with a total netinflow of up to 3.13 trillion VND, the second highest since the beginning of2022 (only after May). Accumulated from the beginning of this year, ETFs haveattracted 11.4 trillion VND," SSI said.
Similarly, cash flow from active funds was more positive in October. Accordingto SSI's assessment, active funds disburse more cautiously than ETFs but aremore active at the end of the month. The total net inflow was nearly 700billion VND, the highest level since July 2021, and helped narrow the netwithdrawal since the beginning of this year to just over 1.3 trillion VND.
“The cash flow movement of investment funds into the stock market in Octoberwas more positive than expected, after the sharp decline of the market causedby internal unexpected factors,” SSI said in its report.
The more positive movement of foreign investors occurred in the context thatthe VN-Index fell again to below 1,000 points after two years.
The VN-Index in October fell by 9.2% compared to the previous month, andOctober was the second consecutive month of decline in the context of risingoperating interest rates and a slowdown in the corporate bond market.
According to general statistics, the beverage industry was the only gainergroup in the past month, with an increase of 5.1% over the previous monththanks to foreign capital inflows.
On the contrary, the groups that fell sharply were mainly related to the realestate sector and financial sector due to the influence of macro factors.
According to SSI, foreign investors have been actively net buying into industrygroups with basic fundamentals and positive outlook, but valuation is somewhatstrongly influenced by market movements such as retail essential goods andbanking products.
Among these, banking stocks were a highlight in October with many notabledevelopments.
According to KTSG Online's statistics, in October, among banking stocks, thestocks that were bought the most and with the largest volume of matched orderson the floor were Saigon-Hanoi Bank (SHB), equivalent to more than 14.7 millionshares, followed by Vietinbank (CTG) with more than 5.8 million shares. Interms of net matched value, Vietcombank (VCB) took the lead with 244 billionVND due to its large market price, followed by SHB with more than 150 billion VNDand CTG with 124 billion VND.
On the other side, the stock that was sold the most was Sacombank(STB), up to 29.8 million shares with a value of more than 520 billion VND.
In the whole third quarter, SHB still leads the net buying volume with atotal net buying value of nearly 26 million shares in four consecutivemonths, followed by HDBank (HDB) with more than 19 million shares.
Banking stocks have also fallen in recent years because of the generalinfluence of the market and direct macro factors such as interest rates andexchange rates. However, in October, when the market price dropped,bottom-fishing demand appeared and many banking stocks recovered significantly.
In fact, there has been a lot of supportive information that helped the bank'sstock price recover at the end of October. By the end of the trading session onNovember 7, many bank stocks increased in price on a weekly basis such as MSB(up 5%), TCB (up 5%), VPB (4%), and SHB (up 2%).
SHB is a bank stock that has been noticed by foreign investors recently,especially some ETFs that have continuously increased their holdings. Accordingto recent forecasts and estimates of SSI, funds may increase the volume of SHBshares in the portfolio in the near future.
In general, from the perspective of ETFs, the selection of bank stocks added tothe portfolio is based on the criteria of market capitalisation, liquidity andfinancial factors, which can represent industry developments.
In 2023, foreign investors also assessed the potential of bank stocks from themore allowed rooms for foreign investment and new strategic shareholders.
The prospect of the Vietnamese stock market in the long term is stillpromising, and is a factor supporting the trend of cash flow into the market,at least in November. “However, in the case of macro risks increases, theinvestment cash flow will quickly reverse to withdraw capital from ViệtNam," the SSI report said./.
VNA
