Vietnam Insight

Highlights:

The maximum ratio of short-term funding that can be used for medium- and long-term lending (SMLR) will be raised from the current 30% to 40%, effective July 1, 2026.

Outstanding loans related to 18 projects of Vingroup, Sun Group, and Masterise will be excluded from the calculation of banks' credit growth limits. The proposed project portfolio submitted by Vingroup, Sun Group, and Masterise requires total funding of approximately VND 752.1 trillion, mainly for transportation infrastructure, urban railways, airports, and real estate.

Billionaire Pham Nhat Vuong has personally acquired a nearly 5% stake in LPBank.

Assessment: The market has generally responded positively to measures that provide banks with greater lending capacity while channeling capital toward infrastructure development. We believe these policies are supportive for the banking sector in the short term, as they directly expand lending capacity. However, they also pose potential long-term liquidity risks by allowing a higher proportion of short-term funding to be used for medium- and long-term loans. These developments underscore the government's strong commitment to achieving double-digit economic growth this year. In addition, STB, LPB, and VIC outperformed the broader market, driven by news that billionaire Pham Nhat Vuong had acquired a nearly 5% stake in LPBank.

Technical View: The VN-Index closed the week at 1,871.9 (+47.38 points, +2.6%), while market liquidity continued to decline. The rally was primarily driven by VIC-related and real estate stocks. Market breadth has yet to improve meaningfully. Despite the index's gains, most sectors and individual stocks have not shown a clear improvement in their price trend structure.

Investment Ideas: Investors may consider accumulating stocks that continue to trade sideways or have experienced only modest pullbacks while maintaining solid earnings growth, with a medium-term investment horizon. We do not recommend increasing short-term trading exposure or chasing rallies, as weak market breadth could make recent gains less sustainable. We continue to favor undervalued banking stocks that are supported by multiple positive policy catalysts.