Vietnam Insight

▶ The market extended its decline on Wednesday. In terms of magnitude, today's session marked the sharpest drop since the short-term peak around 1,880. At the close, the VN-Index recorded a decrease of 62 points (-3.58%), with three stocks in the VN30 group – including VIC, VHM, and MWG – closing at their floor prices. Selling pressure surged in the afternoon as forceselling occurred at securities companies, causing many stocks to lose the gains recorded in the morning. VHM and VIC also failed to support the index, both falling to their floor prices and contributing approximately 30 points to the VN-Index's decline. Liquidity increased sharply, and foreign investors also widened their net selling to nearly 2,000 billion VND.

▶ At the close of trading, the VN-Index decreased by 62.03 points (-3.58%), closing at 1,668.53 points. The HNX-Index fell 5.25 points (-1.87%), reaching 275.49 points. Total trading volume across all three exchanges reached 25 trillion VND, equivalent to approximately 1.02 million shares traded. Foreign investors widened their net selling to 1,937 billion VND, focusing on VIC, SSI, and the banking sector. The stocks experiencing the strongest net selling were SSI (-292 billion VND), VIC (-205 billion VND), and VCB (-202 billion VND)... Conversely, notable net buying included VNM (+167 billion VND), HPG (+52 billion VND), and GEE (+27 billion VND)... 

▶ Technical perspective: Force-sell pressure continued, causing the VN-Index to fall sharply with market breadth heavily skewed towards selling. Liquidity increased sharply with a large decrease, and the market entered a state of extreme fear, with most stocks falling below the MA50/200. Currently, many stocks have retreated to low valuation zones, approaching the bottoms of previous historical sell-offs. Unlike the most recent sell-offs, the VIC group of stocks fell sharply (this group alone contributed nearly 40 points to the market's decline). The VN-Index is approaching the lower boundary of the sideways trading range of 1,600-1,800 points. The VN-Index has successfully defended this region multiple times over the past year, so we expect strong buying pressure around this area, especially given the generally positive market earnings results in the first half of 2026. The RSI is currently only 21, implying upcoming technical rebounds.

In the positive medium-term scenario: In an optimistic scenario, a less stressful inflation outlook will create room for more flexible monetary policy, supporting market valuations. Companies maintaining good profit growth and trading at appropriate valuations despite high domestic interest rates could present good investment opportunities for the medium to long term. Under this scenario, the VN-Index is expected to target the 2,000-2,100 point range in the second half of 2026. However, any rebounds in the remaining weeks of July must demonstrate strong bottom-buying demand.

In the base medium-term scenario: Conversely, if net selling pressure from foreign investors continues, and domestic interest rates continue to rise, leading to decreased market liquidity, the VN-Index may lack positive new capital inflows and is likely to consolidate sideways within the 1,750-1,850 point range in the second half of 2026. Weakening VIC and VHM stocks could cause the VN-Index to retest the lower boundary of the previous sideways range – around 1,580-1,600 points. Furthermore, escalating geopolitical tensions between Iran and the US, along with the possibility of the Fed maintaining high interest rates, could be external factors contributing to this negative scenario, putting pressure on exchange rates and foreign capital flows into emerging markets like Vietnam.

Strategy: Investors can focus on selecting stocks with sideways consolidation and strong business growth rather than solely focusing on VN-Index fluctuations for medium-term positions. In the short term, consider stocks that have experienced heavy selling and are showing signs of recovery, such as insurance, technology, and real estate sectors. Investors should limit margin trading until the trend is clearly defined during this period. For companies with poor business prospects after the Q2/2026 results are released, investors may consider reducing their holdings to manage risk.