Vietnam Upgrade Fails to Stem Outflows: HDB, PNJ Hit as Foreign Investors Pull USD 420M

Overview

Foreign investors have net sold more than USD 420 million (VND 10,800 billion) across 10 consecutive sessions since Vietnam’s stock market was upgraded on September 21, with HDBank (HDB) and PNJ seeing the heaviest outflows. The selling pressure pushed foreign ownership in Vietnamese equities to a record-low 13.2% at end-September, according to HSC. The development matters for HDB, PNJ and VHM because it signals that the upgrade has not yet translated into sustained foreign demand.

Key Facts

• Foreign investors net sold over USD 420 million (VND 10,800 billion) in the 10 sessions following the September 21 upgrade.
• In the latest session, foreign investors bought about VND 2,100 billion and sold nearly VND 4,900 billion.
• HDBank (HDB) led outflows with more than 73 million shares net sold.
• PNJ followed with nearly 5 million shares net sold, pushing its price to the floor.
• Foreign ownership in Vietnamese stocks fell to 13.2% at end-September, down about 3 percentage points year-on-year and the lowest on record, per HSC.
• Year-to-date foreign outflows from Vietnamese equities total approximately USD 3.7 billion.
• The VN-Index has lost about 3% since the upgrade and is oscillating around 1,760 points.

What Happened

Since the official upgrade on September 21, foreign investors have recorded only one net-buying session, with continuous selling otherwise. In the latest session, they deployed roughly VND 2,100 billion on the buy side against nearly VND 4,900 billion in sales. HDBank topped the outflow list with over 73 million shares sold, while PNJ saw nearly 5 million shares net sold, dragging its price to the floor. The day’s net selling extended a 10-session streak totaling VND 10,800 billion, equivalent to USD 420 million.

Market strategists attribute the post-upgrade exodus to two main drivers. First, active funds that positioned ahead of the upgrade are locking in profits and restructuring portfolios, while passive funds completed their initial 10% allocation before the upgrade and are now trading minimally. Second, opportunity cost and global capital rotation are pulling money away from emerging markets toward superior earnings-growth stories in U.S., Japanese and Chinese technology stocks. “During a period of monetary tightening to curb inflation, international capital is tending to prioritize returning to the U.S., creating a major headwind for the recovery of Vietnamese stocks,” MB Securities analysts wrote in a strategy report. Tyler Nguyen Manh Dung, Senior Director of Market Strategy Research at HSC, noted the 13.2% foreign ownership ratio is the lowest in history.

Market Context

The VN-Index on HOSE is locked in a tight range around 1,760 points, down roughly 3% from just before the upgrade. Liquidity has remained subdued, with no session exceeding VND 20,000 billion since September 21. Vingroup-related stocks continue to exert outsized influence on the index; in the latest session, decliners outnumbered advancers but the VN-Index still rose on strength in VHM and VPL. HDB closed at 28,050 on October 6, PNJ at 20,150, and VHM at 69,000.

Strategic Significance

For long-term investors, the post-upgrade outflow challenges the assumption that a market reclassification automatically triggers durable passive inflows. The data suggests the first wave of passive money was largely pre-positioned, while active funds are now taking profits. The record-low 13.2% foreign ownership ratio also implies that foreign selling pressure may be closer to exhaustion, but the rotation toward U.S. and Asian technology stocks could persist as long as global monetary conditions remain tight. For HDB and PNJ, the concentrated outflows reflect stock-specific liquidity and valuation dynamics rather than a broad rejection of Vietnamese fundamentals. The upgrade remains a structural positive for market accessibility, but its near-term impact is being overwhelmed by macro forces.

What to Watch

• Monthly foreign ownership and net-flow data for September and October to confirm whether the 13.2% ratio marks a trough.
• VN-Index behavior around the 1,760-point level and whether liquidity can recover above VND 20,000 billion.
• HDB and PNJ foreign-room filings and any block trades that could signal a reversal.
• Further strategy notes from HSC, MB Securities and other brokers on passive fund allocation schedules.
• Global monetary policy signals, particularly U.S. Federal Reserve rate guidance, which influence emerging-market capital flows.