A study on the impact of foreign investors’ activities on the stock market in Vietnam

Abstract

This research examines the impact of foreign investor activities, such as foreign direct investment (FDI) and foreign portfolio investment (FPI), on Vietnam’s stock market from January 2010 to February 2020. The results show that almost all activities of foreign investors (particularly trading behaviour) have no impact on stock index volatility and market capitalisation value. In addition, the number of newly registered foreign direct investment projects affects the Hanoi Stock Exchange's (HNX)’s capitalisation. This result is consistent with Bloomberg’s report that, in recent years, domestic investors have played a significant role in the development of Vietnam’s stock market.