Foreign capital awaits fresh catalysts ahead of Vietnam market upgrade
The Sep 14-18 trading week will put FTSE-linked capital flows in focus, though analysts say Vietnam's market upgrade is unlikely to immediately reverse foreign selling.
Foreign capital remains cautious ahead of Vietnam's potential market upgrade, with analysts warning that a fresh catalyst is needed to spark significant buying. The FTSE-linked capital flows are expected to focus on the September 14-18 trading week, though an immediate reversal in foreign selling pressure is unlikely. Vietnam's market recently tumbled, with the VN-Index falling 3.12 percent last week and hovering below the psychologically important 1,800-point threshold.
Securities firms like Vietcap Securities predict the index could struggle toward support at 1,780-1,790 points, while Thien Viet Securities warns of further weakness among large-cap stocks and banks, which could push the market toward 1,770-1,780. The market upgrade to secondary emerging-market status is set for September 21, but foreign investors have yet to deploy significant additional liquidity following the rebalancing of the Fubon FTSE Vietnam ETF and the FTSE GEIS capital allocation.
MBS Research estimates that more than US$1.8 billion from passive ETFs could eventually be allocated to Vietnamese equities, divided into four phases over the next two to three years. Despite the upgrade, market performance typically improves over the long term, according to historical data from other FTSE Russell upgrades.
Written by urgent.news from SGGP English Edition Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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