Vietnam Insight

Highlights:

According to data released by the U.S. Department of Labor, the Producer Price Index (PPI) rose by 0.7% in February, exceeding analysts' forecast of 0.3% and surpassing the previous month's increase of 0.5%.

On March 19th (Vietnam time), after a two-day meeting, the Fed decided to keep the reference interest rate at 3.5%-3.5%, the same as the January meeting.

The State Bank of Vietnam proposed allowing major and critical projects in the capital to borrow beyond the limits, with a maximum of 38% of the owner's equity for an individual borrower and 52% for related groups.

Assessment: The market remains at risk due to geopolitical tensions, causing the downward trend to continue. High oil prices have raised concerns about potential stagflation in the future. Meanwhile, Trump seems to be looking for ways to "reverse course" and declare a victory, though further monitoring is needed. We believe there are still positive news to support the market, such as the upcoming annual shareholders' meeting and market upgrade, but sector performance will be differentiated.

Technical View: The VN-Index closed the week at 1,647.8 (-48.13 points; -2.86%) with reduced liquidity. The market continues to decline towards the lower bound of the trading range of 1,600 – 1,800, which is a strong support zone. We expect a technical recovery in this range. However, the long-term market trend remains sideways with stock differentiation.

Investment Ideas: Investors should limit full deployment of purchasing power until there is more clarity on geopolitical developments in Iran. During this period, priority may be given to domestic-driven sectors such as public investment, banking, and construction materials. Additionally, the declines caused by cross-margin call pressures may create opportunities to buy at attractive price levels. Investors can also consider commodity stocks as commodity prices enter an uptrend (e.g., fertilizers). However, these stocks tend to be volatile, so strict risk management is needed if the market environment changes.