Some Opinions Says”With so many mega stock and bank scandals, who would want to keep them and finally money ended up in someones pockets.”
In 2023, foreign investors made a noticeable shift away from Vietnamese stocks, preferring to divert their funds toward developed markets. Here’s a more detailed overview:
Market Environment Overview:
Vietnamese stock markets encountered several challenges, including high-profile scandals involving major banks and market manipulation. These incidents eroded confidence in the market’s integrity and reliability.
Foreign Investor Actions:
Foreign portfolio investors consistently sold off Vietnamese stocks. The Ho Chi Minh Stock Exchange saw 13 consecutive days of net selling by foreigners, surpassing the combined sales of the previous two months. The total sell-off for the year reached a significant VND22 trillion.
Actively managed funds, responsible for dynamically adjusting investments based on market conditions, experienced adverse market conditions. This led to losses ranging from 25% to 30%, compelling them to sell off stocks due to pressure from investors demanding action to mitigate losses.
Perception of Market Risks:
Analysts differentiate between risks perceived in specific stocks and the overall market situation. While some foreign investors identified risks in certain stocks, the broader market indicators remained relatively positive. No significant systemic risks appeared to threaten the market as a whole.
Shift Towards Developed Markets:
Foreign investors opted to divest from Vietnamese stocks, reallocating their investments to more developed markets. This move was driven by the anticipation of a potential recovery in these markets, particularly due to the expected decrease in interest rates early the following year, prompting them to reposition their portfolios.
Regional Trend Observations:
The trend of moving investments from emerging markets like Vietnam to established ones wasn’t unique to Vietnam alone. Other Asian countries, including China, South Korea, Hong Kong, and Thailand, witnessed similar shifts in investor behaviour. The inclination was to seek stability and potential growth in more established markets amid changing global economic conditions.
In essence, the investor exodus from Vietnamese stocks in 2023 can be attributed to a mix of market-specific challenges, perceived risks in specific stocks, and a broader investor trend to seek more stable investment opportunities in developed markets. This movement reflects a cautious approach among foreign investors, aiming to position themselves favourably in anticipation of potential market fluctuations and global economic changes.