[HANOI] Foreign outflows from Vietnam stocks are easing, helped by renewed strength in the country’s currency and lower valuations.
Global funds sold a net US$723 million of local shares this month to Tuesday (Oct 28), down from over US$900 million last month and a record US$1.5 billion in August, data compiled by Bloomberg show.
The tapering, alongside a rebound in the local currency that is on pace for its best month since January, could provide a further tailwind for one of Asia’s hottest stock markets this year. Local shares have risen in 2025 on optimism about strong economic growth, capital market reforms, and Vietnam’s recent upgrade to emerging-market status, that may attract billions in inflows next year.
“We do recommend having an overweight allocation in Vietnam because we like the growth story,” said Khoi Vu, an Asean equity strategist at JPMorgan Chase. “We think that the equities there could go substantially higher.”
To be clear, global funds remain on pace for their biggest annual outflow from Vietnam since at least 2010, the data show. Foreigners have pulled more than US$4 billion from local shares this year, taking profits after the benchmark Vietnam Stock Index rallied over 33 per cent since Jan 1.
As a result, foreign ownership has fallen to a record low of 15.3 per cent of total shares outstanding this month, according to HSC Strategic Market Research. Rising hedging costs, following a more than 3 per cent drop in the dong against the US dollar this year, worsened the selling pressure.
Still, softening valuations, a 10 per cent GDP growth target for next year, and expected inflows from emerging-market funds could attract more foreign flows in 2026. The country’s FTSE upgrade may bring in US$1 billion to US$1.5 billion next year, likely reaching US$5 billion later, according to Quynh Cao, head of institutional business at VnDirect Securities.
The country’s stocks currently trade at 12 times forward earnings, near a three-year high, but in line with its long-term average, data showed.
“Vietnamese listed equities still offer some of the world’s most attractive ratios of low valuations to high EPS-growth and return-on-equity,” said Christopher Beselin, chief investment officer at Endurance Capital Group. BLOOMBERG
