Attract foreign capital into the stock market

VCN - According to experts, with the attractive price of the current stock market, it is predicted that foreign capital flows into the Vietnamese market will see positive signs in the near future.
Proactively solving shortcomings to upgrade stock market Proactively solving shortcomings to upgrade stock market
Consider raising the level of penalties to ensure fairness and transparency in the stock market Consider raising the level of penalties to ensure fairness and transparency in the stock market
Public investment to be the foundation for the development of the stock market Public investment to be the foundation for the development of the stock market
Attract foreign capital into the stock market
It is predicted that foreign capital flows into the Vietnamese market will see positive signs. Photo: Internet

Foreign investors have been net-buying from early in the year

The continuous raising of interest rates by US Federal Reserve System (FED), making the rate rise to the highest level since the global crisis in 2008, has caused global capital flows to be unstable when costs increase. However, in Vietnam’sstock market, foreign investors have continuously been net buyers in recent years. Since the beginning of the year, foreign investorshave net bought about VND7,300 billion.

The restructuring of investment capital flows into emerging markets and frontier markets is expected to take place strongly, this change of capital flows will have a direct impact on Vietnam's stock market. However, Vietnam's GDP growth rate of over 8% in the previous year, the expected rate of 6.5% this year, the plunge of Vietnam's stock market last year, and P/E ratio of 10x - the most attractive level in the past ten years since 2012, are positive signs that foreign capital inflows may still pour in Vietnam's stock market.

“Motivated by the forecast of Vietnam's economic growth this year, the attractive valuation of the current stock market, foreign capital inflows pouring into the Vietnamese market are predicted to remain positive in the near future”, said Mr. Yun Hang Jin, Chairman of Members’ Council of KIM Vietnam Fund Management Company (KIM Vietnam).

He said that since August 2019, foreign investors were net selling continuously, but since the fourth quarter of 2022, theyhave been net buying and extended their net buying momentum. This cash flow also contributed to the recovery of Vietnam's stock market after a prolonged decline.

In addition, from 2007 to March 2023, the net transaction value of foreign investors is VND72,000 billion, Vietnam is becoming a potential destination for many businesses in expanding their production chain post-pandemic. Many foreign investors visited Vietnam last year, so it is expected that FDI inflows will resume the increase this year, with a focus on restoring newly registered capital flows and M&A inflows. Foreign investors are expected to resume investment in the Vietnamese stock market.

“Vietnam's stock market is currently relatively attractive compared to other countries. If economic indicators remain stable, it is forecasted that foreign capital flows will continue to pour into the Vietnamese market. In February and March, we also conducted many promotional campaigns in Korea, Japan and Thailand to introduce Vietnam's economic potential and people,’’ said Mr. Yun. Hang Jin.

Implementing solutions to remove restrictions on foreign investment

Regarding attracting foreign investors to Vietnam's stock market, Mr. KOJIMA Kazunobu, JICA Consultant, Chief Consultant, Daiwa Research Institute said that MCSI assessed that the Vietnamese stock market haseasier access conditions for investors. The fundamental and most significant problem for the Vietnam market is the foreign ownership limit (FOL) ratio and the limit ratio applicable to foreign investors as stipulated in the company's charter. For foreign investors to have easier access to the Vietnamese stock market, it is necessary to consider adjusting the foreign ownership ratio. Improvingthe foreign ownership ratio is also an essential condition to upgrade Vietnam's stock market.

According to Mr. Do Bao Ngoc, Deputy General Director of KienThiet Securities Vietnam, besides the attractive factors of valuation and transparency, Vietnam should apply a newtechnology system to provide new products to help investors have tools to prevent risks; speed up the equitization process of SOEs, creating quality goods for the market, helping to rapidly increase the scale of Vietnam's stock market to meet the investment standards of foreign investors; accelerate the opening room for foreign investors in many conditional business lines and sector to increase attract foreign capital.

Mr. Vu Chi Dung, Director of the International Cooperation Department, State Securities Commission (SSC), said that one of the effective solutions is the issuance of a Non-voting depositary receipt (NVRD). The regulation of NVDR is to help foreign investors who want totrade shares of public companies that have run out of foreign room or conditional industries.

The Securities Law 2019, the Enterprise Law 2020, and Decree 155/2020/ND-CP provide regulations related to NVDR, creating a premise for developing a legal framework for product deployment in the future. To execute NVDR, it is necessary to prepare the trading system, operating mechanism as well as specific guiding regulations.

According to Mr. Dung, through the Joint Capital Market Development Program (J-CAP), the World Bank supports the State Securities Commission in finding experts to develop an NVDR research project for the stock market. The implementation of the portal on transactions outsidethe limit of foreign investors for stocks that have run out of foreign room is also considered.

This solution provides information about foreign investors' transactions outside the limit, including price information and in real-time. However, this requires upgrading the information technology systems of the Stock Exchanges and securities companies.

By Hoai Anh/Ngoc Loan

Related News

Coconut is expected to become a billion-dollar export item

Coconut is expected to become a billion-dollar export item

VCN - Talking to the press at the ceremony to launch the first train carrying fresh coconuts to China, Mr. Luu Van Phi, Director of the Department of Industry and Trade of Tien Giang province, said that Vietnam's agricultural export potential, especially fresh coconuts, is expanding with the appearance of international railway transportation from Song Than station.
Plastic exporters interested in converting to recycling technology

Plastic exporters interested in converting to recycling technology

VCN - The Vietnamese plastics industry is facing major challenges in terms of plastic waste and recycling needs. Secretary General of the Vietnam Plastics Association Huynh Thi My (pictured) shared important information about the transformation in production of plastics enterprises to meet increasing export demands.
Trade Defense: The Key to Success for Vietnamese Businesses

Trade Defense: The Key to Success for Vietnamese Businesses

VCN - From losses and near bankruptcy, many domestic enterprises have recovered thanks to timely application of trade defense measures. Trade defense is also an effective shield for Vietnamese enterprises against a series of lawsuits from importing countries, thereby maintaining advantages and developing on "away grounds".

Latest News

Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3.92%.
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

VCN - Discussing in groups about the project "1 law amending 7 laws" in the financial sector according to the program of the 8th Session on October 29, 2024, National Assembly delegates proposed that the Government should be assigned to make specific regulations on decentralization, granting the right to exempt and reduce taxes, and handling penalties for late payment of taxes...
Removing difficulties in public investment disbursement

Removing difficulties in public investment disbursement

VCN - According to the report of the Investment Department (Ministry of Finance), the estimated disbursement from the beginning of the year to October 31, 2024 is VND 355,616.1 billion, reaching 47.43% of the 2024 plan, reaching 52.29% of the plan assigned by the Prime Minister.

More News

State-owned commercial banking sector performs optimistic growth, but more capital in need

State-owned commercial banking sector performs optimistic growth, but more capital in need

VCN - According to the report sent to the National Assembly before the 8th Session of the Government on investment, management and use of state capital in enterprises nationwide in 2023, the business performance of the state-owned commercial banking sector achieved positive growth.
Stipulate implementation of centralized bilateral payments of the State Treasury at banks

Stipulate implementation of centralized bilateral payments of the State Treasury at banks

VCN - The Ministry of Finance (MOF) gathers feedback on the draft Circular regulating the management and use of accounts of the State Treasury opened at the State Bank of Vietnam (SBV) and commercial banks.
Rush to finalize draft decree on public asset restructuring

Rush to finalize draft decree on public asset restructuring

VCN - According to the Ministry of Finance, the draft Decree regulating the rearrangement and handling of public assets is being urgently completed by the Ministry of Finance to submit to the Government for promulgation.
Inspection report on gold trading activities being complied: SBV

Inspection report on gold trading activities being complied: SBV

The State Bank of Vietnam (SBV) has announced that inspections on compliance with legal policies in gold trading activities of credit institutions and gold trading businesses have been completed and an inspection report is being compiled.
Budget revenue in 2024 is estimated to exceed the estimate by 10.1%

Budget revenue in 2024 is estimated to exceed the estimate by 10.1%

VCN -The Government estimates that state budget revenue in 2024 will exceed VND 172.3 trillion, up 10.1% over the estimate, of which tax and fee revenue will reach 13.1% of GDP.
Ensure timely and effective management and use of public asset

Ensure timely and effective management and use of public asset

VCN – In order to promptly and effectively implement public asset management and use, ensuring compliance with legal regulations, the Ministry of Finance has just issued an official dispatch requesting ministries, branches and localities to comply with regulations in the Government’s Decree No. 114/2024/ND-CP dated September 15, 2024.
Accelerating decentralization in public asset management

Accelerating decentralization in public asset management

VCN - Amending the Law on Management and Use of Public Assets aims to improve regulations on accelerating decentralization and improving efficiency in management and use of public assets, and promoting financial resources, ensuring that the unified application the Law on Management and Use of Public Assets and other legal documents.
Difficulty in finding banks eligible to receive compulsory transfers

Difficulty in finding banks eligible to receive compulsory transfers

VCN - Reporting to the National Assembly, the State Bank of Vietnam (SBV) said that one of the difficulties in restructuring the credit institution system is the long process of finding and negotiating banks eligible to receive compulsory transfers.
Businesses can choose a suitable electronic invoice model generated from the cash register

Businesses can choose a suitable electronic invoice model generated from the cash register

VCN - The Ministry of Finance said that individual business households can choose a suitable model to apply electronic invoice solutions from cash registers, depending on the number of invoices used in the year, in the month and the current status of software solutions and technical infrastructure.
Read More

Your care

Latest Most read
Continue to handle cross-ownership in banks

Continue to handle cross-ownership in banks

VCN - The situation of excess share ownership, cross-ownership between credit institutions (CIs), CIs and enterprises, although has decreased significantly compared to previous periods, is still complicated and requires continued inspection and control.
Striving for average CPI not to exceed 4%

Striving for average CPI not to exceed 4%

VCN - According to the report of the Ministry of Finance, there are still some factors that put pressure on price levels in the remaining months of 2024, so the Ministry has updated 2 scenarios of average inflation in 2024 increasing in the range of 3.7-3
Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

Delegating the power to the government to waive, lower, or manage late tax penalties is suitable

National Assembly delegates proposed that the Government should be assigned to make specific regulations on decentralization, granting the right to exempt and reduce taxes, and handling penalties for late payment of taxes...
Removing difficulties in public investment disbursement

Removing difficulties in public investment disbursement

VCN - According to the report of the Investment Department (Ministry of Finance), the estimated disbursement from the beginning of the year to October 31, 2024 is VND 355,616.1 billion, reaching 47.43% of the 2024 plan, reaching 52.29% of the plan assigne
State-owned commercial banking sector performs optimistic growth, but more capital in need

State-owned commercial banking sector performs optimistic growth, but more capital in need

According to the report of the Government on investment, management and use of state capital in enterprises nationwide in 2023, the business performance of the state-owned commercial banking sector achieved positive growth.
Mobile Version