The recent strength of the Vietnamese stock market is largely driven by these factors:
- A tariff agreement between the U.S. and Vietnam has been concluded. The published framework appears promising, even though the final, product-specific effective tariffs will be announced at a later stage.
- The timing of a potential FTSE upgrade this autumn has gained strong support from the ongoing modernization of the Vietnamese stock market, strengthening expectations for EM upgrade.
- The FED is expected to start cutting interest rates within the next 6–12 months, which would be positive for Vietnam’s bond market and would also support expectations of a stronger dong.
- Vietnam’s economy has achieved 8% GDP growth, and the government remains highly active in supporting further growth through major infrastructure projects, VAT reductions, acceleration of real estate permitting, and increased bank lending.
The VN Index has broken through the 1,500-point level. Foreign investors have returned as net buyers following the summer’s U.S. tariff news, although cumulative net buying remains negative year-to-date. The market may continue its upward momentum, supported by low valuations, strong sentiment, and solid fundamentals.
The market rally has been uneven. In PYN Elite’s portfolio, broker stocks have been flying, and Vietnam Airlines has also performed strongly. Bank stocks have risen, though at a more moderate pace. Several holdings in the portfolio have not yet taken off. Our EUR/USD currency hedge has worked well, mitigating the negative impact of the euro’s strength.
We are already viewing guidance from brokers suggesting the VN Index could reach 1,800 points by Christmas. We do not consider this an unrealistic scenario, although profit-taking among local investors could occasionally trigger sharp pullbacks.