Foreign investors are in a selling mood when it comes to the Vietnamese stock market as the US Federal Reserve’s recent decision to taper its “quantitative easing” packages has sparked massive selloffs in regional stock markets.

Vietnam's benchmark VN-Index fell 1.21 percent to 480.91 points by midday on selling pressure by foreigners that affected local investors, Reuters reported.

On the Ho Chi Minh Stock Exchange (HoSE) last week, investors maintained a net-selling mood for five consecutive days, with total net-selling volume and value reaching 13.7 million shares and VND444.37 billion ($20.88 million), respectively. 

The selloff was among the main reasons for the 4.13 percent drop, or minus 21 points, of the benchmark VN-Index of HoSE to 486.82 points by the end of last Friday.

On Friday alone, the total net-selling value reached VND156 billion, the strongest volume since early August, causing the VN-Index to drop 9.3 points, or 1.87 percent, a one-month low.

However, on the Hanoi Stock Exchange (HNX), foreign investors switched to a net-buying mood, with VND9.5 billion worth of value. But a selloff of VND4.18 billion of shares on Friday dragged the HNX-Index down by 0.33 percent (0.53 percent) to 61.52 billion.

During the period VNM, the share of Vietnam’s leading dairy manufacturer, Vinamilk, topped the net-selling list with VND141 billion worth of shares sold in five sessions in a row, followed by other blue-chips like BVH of Bao Viet Group (VND60 billion), VCB of Vietcombank (VND39 billion), and MSN of Masan Corp (VND33 billion).

The Deutsche Bank AG London Branch and related organizations late last week announced that they had sold 395,000 VNM shares as of August 15, reducing its holding ratio from 6 percent to 5.95 percent, equivalent to the holding of about 49.58 million VNM shares.

Market Vectors Vietnam ETF reportedly withdrew $6.5 million from the local stock market last week, $5.6 million of which was pulled in the last trading session on Friday alone.

Regional selloff trend

Regional stock market investors and regulators are also in hot water, witnessing massive selloffs conducted by foreign investors in their own markets following the Fed’s decision, which will take effect next month.

As of last Friday, Bloomberg reported that Asian stocks had fallen by the most since June, amid concern that the US will soon cut its record stimulus and that capital outflows from emerging markets will accelerate.

The MSCI Asia Pacific Index fell 2.2 percent this week, the steepest drop since the five day-stretch which ended on June 21, to 131.39, as Fed minutes showed policy makers support the reduction of $85 billion in monthly bond purchases.

But the regional gauge rose 1.4 percent on the previous day, for its only gain this week, as reports from Europe, the U.S. and China boosted confidence in the economic recovery. The MSCI Emerging Markets Index slumped 2.7 percent.

Stocks on Asia’s benchmark index were valued at 12.8 times estimated earnings on average, compared with multiples of about 15.1 for the Standard & Poor’s 500 Index and 13.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Also according to Bloomberg, by the end of last week, Japan’s Topix index slid 0.1 percent, Hong Kong’s Hang Seng Index (HSI) fell 2.9 percent, China’s Shanghai Composite Index slid 0.5 percent, South Korea’s Kospi Index (KOSPI) fell 2.6 percent, while Taiwan’s Taiex Index dropped 0.7 percent.