Vietnam Insight

Highlights:

PNJ plans to hire an international firm to audit its diamond sourcing process and quality standards.

US President Donald Trump declared an end to the ceasefire with Iran on July 8, less than a month after the two sides signed a memorandum of understanding. Global oil prices surged nearly 12% in just two trading sessions as renewed US-Iran tensions heightened concerns over a potential energy supply crisis.

US inflation unexpectedly eased in June. According to data released by the US Department of Labor, the Consumer Price Index (CPI) rose 3.5% YoY, down from 4.2% in May and below the 3.9% consensus forecast compiled by FactSet.

Assessment: Market sentiment remained weighed down by negative developments surrounding PNJ and FPT. While the domestic and global macroeconomic backdrop has seen little change, and most of the unfavorable news has been company-specific and previously known, Vietnam’s recent macroeconomic indicators have actually continued to show encouraging signs. However, investor sentiment remains fragile as market liquidity has steadily declined. As a result, even isolated negative news can trigger significant market reactions. Sharp, washout-type sessions are therefore likely to continue in the near term.

Technical view: The VN-Index closed the week at 1,787.4 points (-40.8 points, -2.24%) on weak trading liquidity. Market breadth continued to deteriorate as more stocks fell below their MA50 and broke their medium-term uptrends. The index has been consolidating around the 1,800-point level over the past four sessions. A decisive break below this support could increase the likelihood of a further decline toward the 1,700-point area.

Investment Ideas: Investors may gradually accumulate stocks that are trading in sideways consolidation patterns or have experienced only mild pullbacks while continuing to deliver solid earnings growth, targeting medium-term positions. Increasing short-term trading exposure or chasing rallies is not recommended, as weak market breadth could make any rebound unsustainable.