Vietnam Insight

▶ The downward trend eased in Tuesday's trading session, with many stocks recovering after sharp declines, leading the market to close slightly higher. Notably, liquidity remained low, with the total trading value across all three exchanges reaching only about 15 trillion VND, reflecting investor sentiment and uncertainty. A few blue-chip stocks rebounded well, notably ACB, STB, MSN, and MWG. Overall, today's session showed a temporary pause in the decline, a common occurrence after a heavy sell-off.

▶ At the close of trading, the VN-Index rose 2.52 points (+0.14%), closing at 1,793.05 points; the HNX-Index rose 7.38 points (+2.47%), reaching 305.74 points. Total liquidity across all three exchanges reached approximately 15 trillion VND, corresponding to over 597 million shares traded. Foreign investors increased their net selling volume to 870 billion VND, with FPT, TCB, and MBB being the stocks most heavily sold. Conversely, VNM, KDH, and SSI were the stocks most heavily bought.

▶ Technical perspective: After falling to oversold territory, the VN-Index entered a consolidation phase within a narrow range with low liquidity, while foreign investors continued to maintain a net selling position. Market breadth showed signs of improvement, supported by selective capital flows concentrated in the financial, consumer goods, and industrial sectors. Trading activity remained relatively quiet as the index moved around key support levels, reflecting cautious sentiment from buyers. Meanwhile, downward pressure was relatively well controlled as the valuations of many stocks retreated to levels typically seen only during recessions, thereby reducing the impetus for aggressive selling. Therefore, the market is currently in a wait-and-see state, as neither buyers nor sellers have shown clear decisiveness. Technically, the VN-Index closed above the 200-day moving average (MA200), while the RSI stabilized around 35. This suggests that although market momentum remains weak, selling pressure has eased somewhat compared to previous 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 may 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 pressure, improve global growth prospects, and support capital flows back to emerging markets, including Vietnam, in the second half of 2026. Furthermore, Vietnam could be included in 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 aim for 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 (retesting 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.