Macro/ Strategy

Macroeconomic outlook

Vietnam's National Assembly has approved a bold GDP growth target of 10% or higher for 2026, notwithstanding current economic challenges. We believe that with the Government's strong determination, the goal of double-digit growth throughout the 2026-2030 phase is fully within reach. To achieve the sustainable growth in the long-term, Vietnam needs to improve the labor productivity of the economy. In the short-term in 2026, expectations are placed on the transformation of the capital market, policy reform and infrastructure investment to create momentum for the economy. Inflation is anticipated to remain under control at approximately 3.6%, below target cap of 4.5%, while the exchange rate is expected to increase by 3% compared to 2025.

Stock market outlook

The year 2025 marks a pivotal milestone in the history of Vietnam's stock market, defined by FTSE Russell's decision to reclassify Vietnam from a Frontier Market to a Secondary Emerging Market. With the upgrade officially taking effect in September 2026, Vietnam is well positioned to attract substantial capital inflows from global funds. This transition is expected to create positive spillover effects, bolstering market liquidity, valuations, and overall market capitalization.

The stock market will be underpinned by the intrinsic strength of the economy. We project earnings growth for listed companies to reach approximately 18.5% in 2026. Based on a target P/E of 14.5x - 15x, we estimate the fair value range for the VN-Index to be between 1,930 and 2,000. In a bullish scenario, assuming a target P/E of 16x, we anticipate the VN-Index to surpass the 2,100 point threshold.

Potential Sectors

We anticipate that specific sectors and enterprises have the potential to attract robust capital inflows in 2026, including (1) the Banking and Financial services sector, (2) the companies benefiting from FDI and Public Investment, (3) the Retail sector, and (4) the companies participating in key national projects.