Domestic and foreign funds have disbursed up to 5.84 trillion (US$24.69 billion) in the first half of 2023 after the capital flow of exchange-traded funds (ETFs) returned to the market last month, according to a report by SSI Securities Corporation.
ETFs modestly net purchased VNĐ257 billion.
The report revealed that in June, the net selling value of domestic ETFs shrank to VNĐ95.4 billion. The capital inflows into VNDiamond Fund and VNFin Lead were primarily attributed to the improvements.
Particularly, VNDiamond received roughly VNĐ156 billion from the Thailand stock exchange, while VNFin Lead disbursed more than VNĐ32.5 billion on an outstanding profit margin.
However, ETFs that use the VN30 Index as a benchmark continue to see massive net withdrawals, with VFM VN30 seeing a net outflow of VNĐ275 billion.
For the foreign ETFs, Fubon ETF suffered a net sell of VN23 billion due to a lacklustre performance in the Taiwan market. Meanwhile, Vaneck Fund and FTSE Vietnam saw significant net purchases of VNĐ279 billion and VNĐ170.7 billion, respectively.
However, ETFs, which are using the VN30 Index as a base, continued to witness huge amounts of net withdrawal, such as VFM VN30 had a net withdrawal of VNĐ275 billion.
Thái Thị Việt Trinh, a senior macro analyst at SSI, said that the cash flow trend of ETFs depends more on the sentiment of retail investors. In the past, large cash inflows were only seen when the market corrected strongly or uptrends were confirmed.
Compared to regional markets such as Taiwan, South Korea, or Japan, the VN-Index currently does not have an appealing growth rate, so it is a challenge to attract new foreign capital, Trinh added.
She also said that the Vietnamese stock market is currently in a transition phase and most of the difficulties of the economy in the second half of 2022 have also been already reflected in the market.
But Trinh warned that the divergence in monetary policy could create net withdrawal pressure on funds, especially in the case of strong fluctuations in the exchange rate.
Moreover, the structure of industrial groupings on the stock market is currently undiversified, making it difficult for capital flows to diversify investment portfolios. — VNS