The market’s price to earnings (P/E) ratio, which reflects how much investors are willing to pay today for future growth expectations, was 15.1 on September 30 compared to a four-year low of 13 at the end of March when Vietnam saw a surge in Covid-19 cases.

A low P/E ratio indicates that stock prices are cheap relative to earnings and are available at good value, which generally attracts investors.

But with the index rising in recent months as Vietnam succeeded in containing the spread of the coronavirus in April and August, the RongViet analysts said in a report, "The VN-Index P/E is not low enough to attract new inflows."

September in fact saw the largest sell-off by foreign investors in the last five months, with their net selling being worth VND4.5 trillion ($194 million), the report said.

Real estate giant Vinhomes’ VHM, steelmaker Hoa Phat Group’s HPG and dairy giant Vinamilk’s VNM were among the stocks they sold.

The report said the selling by foreign investors could mean the market is likely to go sideways this month.