Horrible July

Hopefully many of us have been focused on our summer holidays and have not wasted time by following the Vietnamese stock market during July. The weakness of the market has come as a surprise, considering the excellent first-quarter earnings growth of listed companies and the brisk growth of the Vietnamese economy in January–June. Both local and foreign investors have been selling Vietnamese equities and falling prices have created expectations of a further downtrend, which is why July also saw some fairly heavy single-day sell-offs. We continue to expect good earnings growth from listed companies for the full year 2026, and we are dismayed by the market decline that has taken place.

Some explanation for the selling can be found in Vietnam’s huge infrastructure investments, strong demand for loans and the resulting rise in interest rates, which has made deposits attractive enough to draw additional money away from equities. The continuing war between the US and Iran is also likely to create uncertainty around inflation expectations and interest rates. Even so, falling share prices at a time of rising earnings have made listed equities more attractively priced than ever. Mobile World Group (MWG), for instance, a retailer growing at a fast pace, traded at a P/E of 20–25 in earlier years but has now slipped below P/E of 10.

Below is the decline in the VN-Index and in the value of PYN Elite’s unit since the beginning of July.