Vietnam Insight

▶ The market tested the 1,800 level on Wednesday and successfully formed a candlestick with a 20-point increase from the lowest price of the session. However, at closing time, the VN-Index was still down 7.4 points, unable to reverse its upward trend. VIC and VHM continued to put pressure on the overall index. Conversely, many sectors such as Banking, Securities, and Information Technology performed well, contributing significantly to supporting the index. Liquidity remained flat compared to yesterday's session, still below the 20-day average. Foreign investors continued their net selling trend with a value of nearly 700 billion VND, notably ACB, VHM, and VIC. The stock that this group bought heavily during the session was FPT, with a net buying value of 657 billion VND.

▶ At the end of the trading session, the VN-Index decreased by 7.46 points (-0.41%), closing at 1,819.01 points; The HNX-Index increased by 2.69 points (+0.85%), reaching 317.48 points. Total trading volume across all three exchanges reached approximately 22 trillion VND, corresponding to over 802 million shares traded. Foreign investors continued to be net sellers with a net selling value of 691 billion VND, with ACB, VHM, and VIC being the most heavily sold stocks. Conversely, FPT and SHB were the stocks that saw significant net buying.

▶ Technical perspective: In the morning session, the VN-Index continued its corrective trend, mainly pressured by stocks related to Vingroup. At one point, the index fell below the 1,800-point mark (MA50). However, underlying demand quickly returned to this important support zone, helping the index regain the MA50 mark, while market breadth improved significantly with more than 173 stocks closing in the green. The VN-Index formed a long-legged candlestick pattern and closed just above the important support zone, which is a positive signal. However, to confirm whether this is a healthy recovery or just a technical rebound, the money flow needs to continue to improve and be strong enough to bring the index back to test the old peak around 1,900–1,950 points. The RSI closed at 37, nearing the oversold zone, suggesting the possibility of a technical rebound in the next few trading sessions.

Foreign investors continued their net selling trend despite market valuations having adjusted to significantly more reasonable levels compared to the peak in Q3/2025. Recently, global capital flows have mainly focused on AI-driven narratives, while US-Iran tensions and high oil prices continue to pressure economies dependent on oil imports. We believe the capital flow trend could reverse if geopolitical tensions ease, thereby triggering a reallocation of funds to markets and sectors not related to AI. Notably, foreign investors were strong net buyers during the market's breakout in 2025, with the banking sector playing a leading role during that period.

In the base-case scenario: A peace agreement between the US and Iran could help reduce inflationary pressures, improve global growth prospects, and support capital flows back to emerging markets, including Vietnam, in the second half of 2026. Furthermore, Vietnam could be added to MSCI's upgrade watchlist and begin receiving passive capital inflows from September 2026 after being upgraded to emerging market status by FTSE. In this scenario, the VN-Index could target the 2,000–2,100 point range.

In the worst-case scenario: Prolonged disruptions in the Strait of Hormuz could further tighten global oil supply, keeping oil prices high for an extended period. This scenario increases the risk of stagflation (high inflation coupled with low economic growth). Historically, such environments are often unfavorable for the stock market and could lead to a deeper correction in the VN-Index (re-testing the 1,580 point level).

Strategy: During this period, investors can focus on selecting stocks with sideways consolidation price structures and strong business growth, rather than solely focusing on the VN-Index's fluctuations (recent gains are largely driven by the VIC group). Based on our observations, many stocks in sectors such as real estate, banking, construction materials, and securities have consolidation price structures, improving business results, and are suitable for investors to invest in anticipation of Q2 and Q3 2026 earnings. Investors should limit the use of margin trading during this period when the trend is not clearly defined.