Vietnam stocks rebound as analysts retain bullish outlook

After several sessions of heavy selling pressure, Vietnam's stock market staged a strong rebound on July 30. Broad-based bargain hunting lifted the benchmark sharply, with banking, securities, and real estate stocks leading the recovery. At the close, the VN-Index surged 2.35 per cent to 1,744.66 points, reclaiming nearly 40 points.

Earlier, the stock market suffered a sharp sell-off on July 22, with the VN-Index plunging 62 points to close at 1,668 points, its lowest level in nearly four months.

Vo Van Huy, manager of the Premium Customer Department at DNSE Securities, attributed the sharp market sell-off last week, particularly on July 22, to three converging factors: rising external risks, weakening equity market liquidity since the start of the year, and company-specific setbacks affecting fundamentally strong stocks.

“With the temporary 10 per cent global tariff regime set to expire on July 24 and the US proposing additional tariffs of up to 12.5 per cent on imports from several economies, including Vietnam, investors are increasingly concerned that final tariff rates could exceed earlier expectations, weighing on exports, capital flows and market sentiment,” he said.

“With real interest rates remaining relatively high, system liquidity becoming less abundant and fresh capital inflows limited, even modest selling pressure can quickly trigger a broader market correction. Once investor sentiment shifts from caution to defence, selling pressure tends to accelerate.”

Despite the late-July correction, analysts remain broadly optimistic about the market's medium-term outlook. VNDirect forecasted the VN-Index will reach around 2,014 points by the end of 2026, representing an increase of 12.8 per cent, based on a target price-to-earnings ratio of 13.5x, roughly 12 per cent below the 10-year average to reflect continued external uncertainties.

“The forecast assumes stronger market liquidity in the second half, supported by the introduction of midday trading and FTSE Russell market upgrade in September. Average daily trading value in 2026 is projected to rise 16 per cent from 2025 to around $1.36 billion per session,” said Hoang Viet Phuong, director of Research and Investment Advisory at VNDirect.

"Vietnam is likely to be placed on MSCI's emerging markets watch list during the June 2027 review, once the central counterparty clearing system becomes operational and current reforms have demonstrated their effectiveness. Under the optimistic scenario, Vietnam could achieve MSCI secondary emerging market status in June 2028, while VNDirect's base-case scenario points to June 2029."

National Securities Corporation (NSI) offers a more conservative outlook, forecasting the VN-Index to end the year between 1,950-1,980 points, implying a valuation of 14.5-14.8x earnings, provided liquidity improves significantly and domestic investors resume their leading role in the market.

“The market has yet to enter a broad-based growth phase, so investment strategies should balance risk management with selective opportunities,” said Nguyen Van Truc, head of research at NSI. “Vietnam's economy continues to expand rapidly, but the financial system is facing greater liquidity and funding-cost pressures. At the same time, the country is entering a new reform cycle, and an FTSE Russell upgrade could become an important catalyst for foreign capital inflows.”

In its July 20 market report, MB Securities projected the VN-Index to reach between 1,770-1,850 points by year-end, based on a 2026 valuation range of 13-13.5x earnings, raising its previous forecast on stronger-than-expected corporate earnings.

“Exchange rate volatility and higher interest rates will continue to weigh on market liquidity in the remaining months of the year. However, earnings prospects for listed companies have improved beyond our initial expectations, particularly in oil and gas, which benefits from higher crude prices, as well as building materials, residential real estate and industrial park developers supported by accelerated infrastructure investment,” said Tran Thi Khanh Hien, head of Research at MB Securities.

Following the government's move on June 27 to raise Vietnam's second-half GDP growth target to around 11.9 per cent to secure full-year growth of at least 10 per cent, authorities rolled out a broad package of policy measures.

Among the most significant was a regulation raising the cap on the ratio of short-term funding for medium- and long-term lending from 30-40 per cent, while excluding most state treasury deposits from the loan-to-deposit ratio denominator.

Analysts Nguyen Viet Sang and Huynh Thi Thu Thao of Mirae Asset Securities Vietnam estimated that the move immediately unlocked around $40 billion in additional lending capacity without requiring banks to mobilise more deposits, while easing funding cost pressures, supporting net interest margins and creating room for lower lending rates.

“Credit ceilings have been removed for industrial park and social housing projects, while a credit mechanism was introduced worth approximately $30.1 billion for 18 strategic infrastructure projects, exempting them from annual credit growth limits," they wrote. "Extended tax and land rent payment deferrals worth around $5 billion are also in place, alongside an increase in the statutory base salary from July 1 to stimulate domestic consumption. Together, these measures are expected to ease liquidity pressures in the second half of the year.”

Meanwhile, resolving long-standing issues in the equitisation and state divestment process is expected to enhance transparency, particularly as Vietnam moves closer to a market upgrade.

Nearly 70 enterprises originating from state equitisation currently face the risk of losing their public company status and being delisted if they fail to meet shareholder distribution requirements before January 2027.

Hoang Van Thu, vice chairman of the State Securities Commission, said this is a necessary market-cleansing process.

“State-owned enterprises should no longer regard equitisation, listing and disclosure requirements as regulatory burdens, but rather as governance standards essential for improving competitiveness and achieving sustainable growth," Thu said. "Public companies must ensure that at least 10 per cent of voting shares are held by a minimum of 100 investors who are not major shareholders. Companies failing to meet this requirement will lose their public company status and be required to delist."

The shareholder distribution requirement has existed under previous securities legislation, but the amended Securities Law establishes a clear transition period to support Vietnam's market upgrade ambitions and improve the overall quality of listed companies, Thu added.

MSCI upgrade hopes fuel momentum in Vietnam's stock market Following its FTSE Russell promotion, Vietnam is now focusing on securing a place on MSCI’s watch list, a key step towards attracting larger foreign investment flows into the country’s capital markets.

FDI listing hurdles lie beyond securities law With the current position of Vietnam's stock market, the State Securities Commission expect foreign-invested enterprises to become one of the key providers of high-quality listings for the market, reflecting its integral role in the economy.