Bitcoin, Tesla's Popularity Is Causing A 'Sentiment Paradox' For Foreign Investors In Vietnam

Despite Vietnam's benchmark VN Index being the top performer in all of Southeast Asia, foreign investors have been dumping Vietnamese stocks to chase gains in Bitcoin BTC/USD and Tesla Inc TSLA.

What Happened: Foreign investors, particularly retail investors from Korea, shed Vietnamese stocks all but one month in 2021, this despite the VN Index posting a 33% gain, reported Bloomberg.

Korean retail investors account for 16% of net foreign inflows between 2017 and 2019, but they also offloaded $166 million worth of Vietnamese shares so far in 2021, Bloomberg reported citing data from Korea Securities Depositories.

“The market has performed strongly and some investors have cashed out,” with Korean retail investors switching their attention to U.S. tech stocks such as Tesla,” said Stephen McKeever, head of institutional client division at Ho Chi Minh Securities Corp, as per Bloomberg.

Lee Soyeon, a market strategist at Korea Investment & Securities Co said that Bitcoin and U.S. stocks showed big swings, and “investors were attracted to them, rather than Vietnam,” according to Bloomberg.

See Also: How To Buy Bitcoin (BTC)

Why It Matters: Tesla shares have returned 42.25% so far in 2021, while Bitcoin gains have amounted to 64.05%.

McKeever noted that the selling by foreign investors was not indicative of their sentiment towards Vietnam, which “remains very positive,” Bloomberg reported.

“We call this the sentiment paradox,” said McKeever.

It is not only foreign investors in Vietnam that have taken a liking to Bitcoin, the locals are also taking to investing in highly volatile assets like cryptocurrencies driven by a paucity of investment options.

Price Action: On Thursday, Tesla shares closed 6.1% lower at $1,003.80 in the regular session and fell 0.62% in the after-hours trading. At press time, BTC traded 3.15% lower at $48,208.43 over 24 hours.

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