Vietnam's stock market is a bright spot in Asia

DNHN - In April, foreign capital left Asian markets for the fourth month in a row. This is because investors are worried that the COVID-19 pandemic in China will slow economic growth in the region and that central banks around the world are tightening their money supply. But there are still markets, like Vietnam, that are attractive to foreign investors and are seeing new capital flows.

According to data from Refinitiv, foreign investors sold Asian stocks worth $14.22 billion in April. This was the fourth month in a row that they sold more than they bought. From January to April, foreign investors sold assets worth a total of 45.76 billion USD. This is the most in the first four months of a year since at least 2008.

Economists say that China's blockade to stop the pandemic will slow the growth of the economy in the area. Aninda Mitra, head of Asian macro and investment strategy at BNY, said that China's economic growth is slowing and that import growth has dropped to almost 0% year over year. Mike Leung, chief investment officer at Wocom Securities in Hong Kong, said, "The market is worried that China's economic growth won't meet its goal." Transport and supply chains are being messed up by the strict lockdowns in Shanghai and, possibly, Beijing. Key economic indicators show that growth has slowed. Fitch Ratings has cut its prediction for China's economic growth in 2022 from 4.8 per cent to 4.3 per cent.

Taiwan, South Korea, and India lost money in April 2022. This was the case for $8.86, $4.97, and $2.24 billion. Alicia Garcia Herrero, Natixis' chief Asia-Pacific economist, said increasing inflation has remained a concern. In April 2022, Korea's consumer price inflation hit a 13-year high. It boosted its benchmark lending rate by 40 basis points this week to slow retail price increases.

This was done to tighten currencies around the world, just like the US Federal Reserve did when it raised interest rates by 0.5 per cent in May and shrank its balance sheet, taking money off the market.

But there are still markets that bring in money from other countries, like the Vietnamese stock market, which got $175 million in net purchases in April 2022. In April, the Vietnam stock market had a lot of red-floor sessions, just like the rest of the world market.

Foreign investors, on the other hand, saw this as a good chance to buy-in. In April, they bought 819 million shares worth VND 39.154 billion and sold 731 million shares worth VND 35.134 billion. As a result, foreign investors bought a net total of 88.4 million shares, which is equal to a net value of nearly 4.2 trillion dongs.

Suresh Tantia, a senior investment strategist at Credit Suisse, said, "The Southeast Asian markets are very attractive because they have some of the best growth potentials in the region, which is expected to lead to high levels of growth.

 Earnings growth was better than markets in North Asia because it was helped by the recovery after the pandemic, commodity prices went up, and the central banks still had room to make policies that were anti-inflationary and didn't hurt the economy too much.

Bloomberg says that the parties predict that the VN-EPS Index will grow by 25% over the previous year in 2022 and that Yuanta Vietnam's EPS will grow by 21%. So, even if growth is slow in 2021, listed companies can get back on track in 2022.

According to MBS's forecast model, the VN-Index can reach between 1,646 and 1,688 points in a best-case scenario where the average market liquidity is between 30,000 and 31,800 billion dongs, which is up 20.6% from last year's average level.

Anh Dung