Foreigners Speed Up Sales of Vietnamese Shares Despite Market Upgrade Prospect

Despite the anticipated upgrade of Vietnam's stock market from a frontier market to an emerging market, foreign investors have been accelerating their net selling of Vietnamese shares. This trend, which has been ongoing for several years, has raised concerns among market participants and experts alike. In this article, we will explore the reasons behind this continued selling pressure and discuss the potential implications for the Vietnamese stock market.

One of the primary reasons behind the continued net selling pressure from foreign investors is the global economic uncertainty, particularly the return of President Donald Trump and his 2.0 policies. These policies may lead to a rising Dollar Index and potential financial market volatility, posing challenges for emerging economies like Vietnam (BIDV Securities, 2024). Additionally, the focus on tariff tools and the likelihood of tariff wars between countries, along with the potential return of US inflation, may deter foreign investors from allocating capital to Vietnam (Vietnam Briefing, 2025).

Another factor contributing to the continued selling pressure is the historical trend of heavy foreign selling in Vietnam. The country has been a market with significant foreign selling in recent years, with the largest selling rate in the region when calculated based on capitalization or total value held by foreign investors (Vietnam Briefing, 2025). This trend has created a negative perception among foreign investors, making them more likely to sell their shares in the Vietnamese market.

The lack of clarity on foreign capital movement in 2025 is also a concern for foreign investors. The new policy focus of President Trump creates uncertainty about the movement of foreign capital, making it difficult for investors to make informed decisions about allocating capital to Vietnam (Vietnam Briefing, 2025).

Concerns about the market's ability to attract large capital flows are another reason for the continued selling pressure. Although the upgrade to an emerging market is expected to attract foreign capital, experts caution that the ability to attract large capital flows is still uncertain (Vietnam Briefing, 2025). This uncertainty may deter foreign investors from allocating capital to the Vietnamese market.

Despite these challenges, the current macroeconomic conditions in Vietnam remain favorable for foreign capital flows. The low inflation and accommodative interest rates are expected to continue influencing foreign capital flows into the Vietnamese stock market in 2025 (Nhat Viet Securities Company, 2025). The anticipated upgrade of Vietnam's stock market to emerging market status is expected to attract billions of dollars in capital flows from both active and passive investment funds, significantly improving liquidity and supporting sustainable growth in the stock market (Nhat Viet Securities Company, 2025).

In conclusion, the continued net selling pressure from foreign investors in the Vietnamese stock market, despite the anticipated upgrade to an emerging market, can be attributed to several factors, including global economic uncertainty, historical selling trends, lack of clarity on foreign capital movement, and concerns about the market's ability to attract large capital flows. However, the current macroeconomic conditions in Vietnam remain favorable for foreign capital flows, and the anticipated market upgrade is expected to attract significant capital inflows, driving growth in the stock market. Investors should remain vigilant and monitor the market closely to capitalize on potential opportunities that may arise from these developments.