HCMC – Foreign investors are exiting Vietnam’s stock market, piling pressure on the benchmark VN-Index of the Hochiminh Stock Exchange.
Data from Thien Viet Securities Corporation (TVS) showed that foreign investors withdrew a net US$23 million from Vietnamese equities in January alone as they reduced exposure to emerging markets to mitigate risks.
The decline in foreign investment is partly driven by concerns over a potential trade war between the U.S. and its trading partners. “Investors are worried about the possibility of new tariffs on Vietnamese goods, which could disrupt global supply chains and impact exports,” said Nguyen Duc Anh, an analyst at TVS Research.
The VN-Index closed flat at 1,265 points in January, with trading volume on the Hochiminh Stock Exchange dropping 22% month-on-month. TVS Research cited investor uncertainty over the new U.S. administration and potential trade policy shifts as key factors behind the subdued performance.
Adding to market jitters, the Vietnamese dong has weakened against the U.S. dollar, and interbank interest rates have risen. This has further dampened investor sentiment, prompting many to shift funds toward alternative assets such as gold and cryptocurrencies, which have performed better in recent months.
Despite the cautious market environment, corporate earnings in Vietnam rebounded. Vietnamese companies reported a 19.3% year-on-year rise in net profit for 2024, recovering from a 3.4% decline in 2023. Profits increased across 16 out of 19 sectors, with financial and non-financial companies leading the growth. Banks, tourism, and industrial goods were the top-performing sectors.
However, TVS Research warned that this profit recovery may not be enough to counteract broader market headwinds. The firm anticipates a potential correction in February and advises investors to remain cautious.
