VNStockNews.com - The high net purchase of foreigners has helped lessen the drop of the index of Ho Chi Minh Stock Exchange (HOSE) in 2010. On Hanoi Stock Exchange (HNX), listed shares were mostly penny stocks, so it could not attract the attention of foreign investors, making the HNX Index fall over 50 percent in the year.
The realty stocks attracted the most attention of foreigners with the total trading value of about $6 billion, accounting for one sixth of the market value.
Till December 29, 2010, the total net purchase value of foreigners for listed shares in 2010 is estimated at 16.039 trillion dong, including 15.251 trillion dong on the southern bourse and 788 billion dong on the northern one. This year's figures were much higher than 2.792 trillion dong in 2009 and 5.1 trillion dong in 2008.
From 2006 backward, the scale of Vietnam's stock market was relatively small, thus the transactions of foreigners remained modest.
In 2007, the stock market blossomed thanks to massive foreign indirect investment (FII) capital inflow into Vietnam. The transactions of foreigners on STC accounted for 16 percent of the market's transactions and the net purchase value was up to 23 trillion dong in 2007.
2008 was a rough year for Vietnam stock market due to macroeconomic obstacles. In addition, the economic crisis starting from October also caused heavy impacts on the global financial market. However, in 2008, the net purchase of foreigners was still up to 5.1 trillion dong and their transactions accounted for nearly 16 percent of the total market trading.
In 2009, the stock market blossomed again but the net disbursement of foreigners was only 2.792 trillion dong.
In 2010, the FII inflow returned to Vietnam strongly despite of unfavourable macro information. The trading value of foreigners contributed over 10 percent to the liquidity of the market.
The high net purchase of foreigners for some key stocks on the stock market was an important factor helping ease the fall of the VN Index in 2010. Meanwhile, on HNX, listed shares were mainly penny stocks, so the northern bourse could not attract much attention of foreign investors and the HNX Index fell over 50 percent in the year.
Notably, net purchase of foreigners mainly focused on some share codes. On STC, the total value of top ten share codes with highest net purchase accounted for up to 70 percent and it was up to 120 percent on the northern bourse.
Currently, the total market value of share codes held by foreign investors was about 120 trillion dong, or $6 billion, accounting for one sixth of the market value of whole listed firms.
On the southern bourse, share code luring the most attention of foreigners was HAG with net purchase value of up to 1.99 trillion dong. The holding ratio of foreign investors into HAG was up to nearly 32 percent. The high net purchase of foreigners also helped this share code gain points in the year.
Following were VIC (1.668 trillion dong) and BVH (1.083 trillion dong). The high net purchase of foreigners also helped VIC and BVH gain two fold increase in 2010. Currently, foreigners hold 32 percent stake into VIC and 24 percent stake into BVH.
Additionally, other share codes also draw much attention of foreigners such as KBC, FPT, HPG, VNM and SJS.
Meanwhile, some other share codes saw highest net sale on STC including ITC (176 billion dong), ITA and VSH (152 billion dong).
On HNX, foreigners posted net purchase for PVX (236 billion dong), KLS (170 billion dong) and VCG (111 billion dong). These share codes always reached highest trading volume and led the market. Meanwhile, share codes posted highest net sale including BVS (51 billion dong), SHB (46 billion dong) and SCR (44 billion dong).
In 2010, although foreigners kept consecutive net purchase in Vietnam stock market, the FII inflow into Vietnam reached only about $1 billion, much lower than that in regional countries.
Also in 2010, almost share codes decreased strongly, bringing the P/E of the market to only 10-11 times whereas the P/E of emerging markets was at 15-18 times. This is a very important factor to attract the valuable investment capital inflows.
In 2011, Vietnam will still be able to attract FII but it may not blossom as the heyday in 2006 and 2007.
