According to Vietnam’s Ministry of Finance, one key reason for the foreign net sell-off of over VND 3,100 billion (approximately USD 125 million) on the local stock market is the impact of the new U.S. retaliatory tax policy.

Foreign investors sold over VND 22.5 trillion in Q1

At a regular press conference held on April 3, Ha Duy Tung, Vice Chairman of the State Securities Commission (SSC), confirmed that in the first quarter of 2025, foreign investors net sold VND 22,526 billion (~USD 900 million). In the morning session alone on April 3, the figure reached VND 3,186 billion.

Tung attributed the heavy sell-off to the recent policy shift from the United States, which imposed a 46% retaliatory tariff on Vietnamese exports.

However, he noted that the net sell amount represents just 1.9% of the total foreign portfolio value in Vietnam - “a relatively modest proportion,” Tung said.

Market upgrade efforts ongoing

Responding to questions about Vietnam's market upgrade prospects, Tung stated that the Ministry of Finance has been actively working to complete its legal framework and policy mechanisms to meet international criteria.

In September 2024, the Ministry issued Circular No. 68, which was positively received by investors.

“From a legal standpoint, we have largely met the requirements for an upgrade. However, this also depends on investor experience and practical assessments,” Tung added. “In the coming period, we will continue addressing technical issues, hosting investor dialogues, and promoting investment to enhance international evaluations and aim for a market upgrade this year.”

Capital flows depend on global sentiment

Deputy Minister of Finance Nguyen Duc Chi stressed that fluctuations in foreign capital - whether inflows or outflows - are a natural part of market behavior.

“There are multiple factors at play: internal strategies of individual funds, changes in global policy, or investor sentiment. These are not unique to Vietnam,” he said.

Chi clarified that the process of upgrading a stock market isn’t based on any rigid checklist of conditions. Rather, it involves meeting legal and qualitative requirements such as transparency, market accessibility, and ease of entry and exit for foreign investors - ultimately subject to the evaluations of international rating organizations.

Toward sustainable and substantial market development

“Our goal is to develop a stock market that is genuinely stable and sustainable,” Chi emphasized. “When we reach that quality threshold, international organizations will acknowledge it with a market upgrade.”

“Such an upgrade will simply be a milestone that marks the transition to a new, higher-quality stage of development. It is the responsibility of both regulatory agencies and market participants to build a more robust, transparent, and high-quality securities market,” he concluded.

Nguyen Le