Vietnam Insight

Highlights:

_ In the final week of November, VND interest rates on the interbank market recorded a sharp increase, with both overnight and 1-week tenors reaching 6.5%/year – retesting the highest level since the beginning of the year, previously seen at the end of June.

_ The SBV issued an official directive guiding credit institutions to continue supporting individuals and businesses affected by storms and floods in Central Vietnam, ensuring production restoration, stabilizing livelihoods, and promptly processing credit-related documentation.

Assessment: Over the past week, aside from the VIC group, other sectors traded sideways within a narrow range, with low liquidity and no signs indicating that a short-term uptrend has returned. In the context of overnight interbank rates rising sharply due to pre–Tet liquidity needs, along with potential increases in funding demand for disaster-relief support, market sentiment is unlikely to improve quickly. We expect that a possible Fed rate cut in December may help lift investor sentiment.

Technical View: The VN-Index closed the week at 1,690 points (+36.06 points; +2.18%) with low liquidity. The market remains within the 1,600–1,700 trading range. However, this week’s gain was driven mainly by the VIC group, meaning the VN-Index has not fully reflected the broader market’s movements. Other sectors continue to trade sideways after the sharp correction since late October.

Investment Idea: Medium- and long-term investors may begin gradual accumulation in sectors showing solid business results and attractive valuations, such as banking, finance, and construction materials. Short-term investors should remain cautious as the market is largely moving sideways; selecting stocks may rely on observing improving price action and money flow, especially in electricity, industrial parks, and technology.