Vietnam Insight

Key highlights:

Deputy Prime Minister Nguyen Van Thang signed Decision No. 40/2026/QD-TTg dated August 5, 2026, issued by the Prime Minister, on criteria for classifying enterprises to restructure state capital at state-owned enterprises and enterprises with state capital.

Total foreign investment attracted has exceeded USD 38 billion, +58% YoY. Notably, newly registered capital more than doubled, while realized FDI reached USD 15.2 billion, +11.76% YoY.

Assessment: The market continued to recover on improving sentiment, information regarding divestments at several state-owned enterprises, a continued improvement in the macroeconomic outlook, and renewed net foreign buying. Foreign inflows have made a meaningful contribution to the market's gains. However, we believe the recovery will face significant pressure next week as profit-taking is likely to emerge. Looking toward year-end, we believe the market could still reach the 2,000 level once it enters an uptrend phase. However, liquidity is unlikely to be as strong as during the 2021 period, when retail investors were the main drivers; instead, foreign capital flows will play a more important role.

Technical view: The VN-Index closed the week at 1,768.06 points (+32.28 points, +1.86%), with low weekly trading liquidity. Market sentiment continued to improve, with broader market breadth as the percentage of stocks trading above their 50-day moving average (MA 50) increased from 14.8% to 26.5%. However, the 1,800-point level, corresponding to the MA 50, will act as a resistance level for this recovery. The market's primary trend remains within the 1,650–1,900 trading range.

Investment idea: Investors can take advantage of market corrections to gradually deploy capital while maintaining an appropriate cash allocation for risk management. Investors should limit the use of leverage (margin) to bottom-fish, as the market could potentially form a second bottom.