Vietnam Insight

Highlights:

Fuel prices continued to drop sharply on March 26, marking two consecutive sessions of declines within just two days. Cumulatively, gasoline prices have dropped by 6,790-9,510 VND/liter, primarily due to the policy of reducing fuel taxes. 

On March 24, the State Bank of Vietnam (SBV) announced the sale of 180-day USD forward contracts with the option to cancel for credit institutions and foreign bank branches with negative foreign exchange positions. 

On March 23, President Donald Trump announced that the US and Iran are having "good discussions" to resolve the conflict. 

The market has recorded many special high-interest-rate packages, ranging from 7-10% per year. 

Assessment: The market saw a recovery week after touching the 1,600-point support zone. However, this is considered a technical rebound based on temporary signs of de-escalation in the conflict. We still assess that risks remain, given the constantly changing statements from Trump. Additionally, the domestic interest rate environment is trending higher, and the exchange rate is under pressure, contributing to the discounting of the index to lower levels.

Technical view: The VN-Index closed the week at 1,672.8 (+25 points; +1.52%) on the weekly chart with stable liquidity. The market is expected to trade within the range of 1,600 – 1,800. However, the index needs to fully break above the 1,750 range to confirm a short-term uptrend. The current reference support level is 1,600 points.

Investment Idea: Investors can consider deploying a low position size as risks remain. Increase position size if the market confirms a breakout above 1,750 along with favorable news. The focus may be on sectors benefiting from domestic factors such as public investment, banking, and construction materials. Additionally, sectors like commodities, insurance, and utilities may be considered in the context of rising commodity prices. However, these sectors tend to be highly volatile, so strict risk management is necessary.