Vietnam Insight

Highlights:

According to data released by the National Statistics Office (NSO), Vietnam’s Consumer Price Index (CPI) rose 5.6% YoY in May, marking the highest inflation rate since early 2020.

Vietnam’s trade deficit exceeded USD 5 billion in May, the largest monthly deficit ever recorded.

Overnight interbank interest rates halved within just two trading sessions, falling from 11% to 5.5% per annum.

As of May 31, 2026, total public investment disbursement reached VND 219.4 trillion, equivalent to 21.6% of the annual plan assigned by the Prime Minister.

Assessment: Recent macroeconomic developments have generally been less encouraging. Economic data are beginning to reflect the adverse impact of elevated energy prices on inflation and the trade balance. Companies that are unable to pass higher input costs on to customers in Q2 are likely to face margin compression. We believe the market is currently in an information vacuum, while the upcoming World Cup is also contributing to subdued liquidity and cautious investor sentiment. Nevertheless, this period may present an attractive opportunity for medium- to long-term investors to gradually accumulate quality stocks at favorable valuations.

Technical View: VN-Index closed the week at 1,838.9 points (-24.59 points; -1.32% WoW) on the weekly chart, with trading liquidity declining both from the previous week and relative to the 20-session average. The market traded within a narrow range, with neither buyers nor sellers showing strong conviction. The index has recently staged a technical rebound after retesting the 50-day moving average (MA50) following three consecutive weeks of correction, largely driven by the pullback in the VIC-related stocks. Most other sectors have continued to move sideways and maintain their existing price structures.

Investment Idea: Investors may consider accumulating stocks that are trading sideways or experiencing mild corrections while still delivering solid earnings growth, particularly for medium-term positions. Sectors worth monitoring include banking, steel, and real estate. However, a phased accumulation strategy is recommended, as most sectors have yet to confirm a clear upward trend.