On the main bourse, the Ho Chi Minh Stock Exchange (HoSE) they sold stocks worth VND14 trillion ($606 million) in the first quarter, including for 28 straight sessions from Feb. 19 to Mar. 24.

Nguyen Son, chairman of the Vietnam Securities Depository, said at a forum Wednesday that foreign investors are making changes to their portfolio after having made major purchases last year.

They invested huge sums last March and April when the benchmark VN-Index dropped to 600-700 points, but the index is now hovering around 1,200 points and its price-earnings ratio is a high 18, which is why their holdings have dropped from 21-22 percent of the market last year to 18 percent now, he said.

Other factors such as the U.S. labeling Vietnam a currency manipulator have also made foreign investors more prudent, he added.

Vu Bang, former chairman of the State Securities Commission of Vietnam, said foreign investors are holding $2.7 billion in cash now compared to $1.2 billion at the end of last year, and are waiting for buying opportunities.

"We do not need to be concerned about foreign investors’ transactions. Not all foreign funds succeed in Vietnam. Some withdraw early, miss opportunities and even lose."

Analysts said one reason foreign investors have been selling is that they want to invest in more developed countries where vaccination campaigns are well underway.

"When the global economy recovers, developed markets will recover faster and therefore investment is pouring into them," Nguyen The Minh, director of analysis at brokerage Yuanta Vietnam, said.

Tran Hoang Son, strategic director of MB Securities, said foreign investors are wary of the strengthening dollar and pulling out of emerging markets to protect their investment against exchange rate risks.