Vietnam Insight

Key highlights:

On August 13, at the Government Office, Prime Minister Le Minh Hung chaired a meeting with the SBV and the banking system. Key points included: credit growth limits (“credit room”) may be reduced in 2027 for banks that fail to comply with directives; the SBV noted that interest rates are likely to remain under pressure in the coming period; and the gap between credit growth and deposit growth remains wide.

SCIC has recently issued its 2026–2030 capital restructuring plan, under which 66 enterprises have been placed on the list for full divestment. On August 11, SCIC also increased its charter capital from VND 19,000 billion to VND 50,000 billion.

Foreign investors have tended to purchase foreign currencies to repatriate profits, with the amount reaching USD 3.77 billion in the first seven months of the year.

Assessment: The market continues to face selling pressure as the banking sector comes under pressure from the potential tightening of credit growth limits if banks fail to comply with lending rate reduction directives. The real estate sector is also under pressure as regulators maintain a stance of more selective control over access to credit. The lack of mention of actively purchasing USD, despite market speculation about such measures, also contributed to the market correction.

Technical View: The VN-Index ended the week at 1,729.08 points (-39.38 points, -2.2%), with low liquidity on the weekly chart. The market came under correction pressure after two weeks of recovery, coinciding with the 50-day moving average (MA50) around the 1,800-point level. The market could potentially form a second bottom around 1,700 points, although it is still too early to determine where the bottom will be. Therefore, the market has yet to regain its medium-term uptrend and continues to trade sideways within the 1,650–1,800 range.

Investment Idea: Investors can take advantage of market corrections to gradually accumulate positions, but should avoid initiating new short-term positions during the decline., also limit the use of leverage (margin) to bottom-fish, as the market could potentially form a second bottom.