It takes time for foreign investors to study the new regulations and change their perception to the Vietnam’s stock market, stated a senior official at the stock market watchdog.
The price to earnings (P/E) of the benchmark VN-Index is not quite cheap to attract new inflows as it is 15.1x (as of 30 September) versus 14.5x – 15x in the pre-Covid time.
The recent uptick of the market, however, is not sustainable, when the margin outstanding may have increased sharply along with the rise.
The VN-Index ranked above Russell 3000, Nasdaq, or S&P 500, among others, in terms of growth in August.
Foreign investors are returning to the market with its net outflow narrowing from VND12 trillion (US$520 million) since its March bottom to VND1.8 trillion (US$78 million) as of mid-August.
The stock market still proves to be quite attractive in the context of redundant liquidity and other investment channels having not fully recovered.
This marked the sharpest drop among stock markets globally during today’s trading session.
Foreign investors have been net buyers so far this month -- a first since January -- amid a stable currency.
The VN-Index's rally stemmed from strong participation of domestic investors and lower selling pressure from foreign players.
The decision, which is set to take effect from May 7 to December 31, is among the ministry's measures to support enterprises and individuals affected by the Covid-19 pandemic.