Vietnam Insight

▶ Selling pressure eased during the week's opening session as the VN-Index's decline paused; meanwhile, market-wide liquidity dropped to a mere VND 15 trillion. The index opened in the red and fluctuated within a narrow range around the reference level for most of the session, closing with a loss of nearly 2 points. This suggests that selling pressure is weakening and the VN-Index may be establishing a new equilibrium zone before determining its next trend. Foreign investors remained net sellers, focusing on the VIC-VHM group and financial stocks.

▶ At the close, the VN-Index fell 1.62 points (-0.09%) to 1,727.46 points, while the HNX-Index dropped 1.35 points (-0.48%) to 278.64 points. Total liquidity across the three exchanges reached VND 14.8 trillion, with approximately 575 million shares traded. Foreign investors were net sellers to the tune of VND 603 billion, notably offloading VIC (-VND 236 billion), VHM (-VND 106 billion), and ACB (-VND 96 billion). Conversely, notable net buying was seen in TCB (+VND 60 billion), VNM (+VND 46 billion), and HDB (+VND 29 billion).

▶ Technical perspective: The market regained balance following two sessions of sharp correction, with most sectors and stocks fluctuating within a narrow range around the reference level. Liquidity declined significantly, reaching just under VND 11 trillion via the HOSE order-matching channel, while the VN-Index saw negligible fluctuation in terms of points. Notably, following two sessions of heavy selling pressure, the drop in liquidity without a corresponding sell-off suggests that supply pressure is gradually easing and the market is beginning to absorb the shares being sold. In the short term, we forecast that the VN-Index may fluctuate within the 1,680–1,720 point range to absorb short-term supply pressure and undergo re-accumulation, thereby laying the groundwork for a new recovery phase.

In the positive medium-term case: In an optimistic scenario, easing inflationary pressures would create room for more flexible monetary policy, thereby supporting market valuations. Companies maintaining solid profit growth and trading at reasonable valuations—despite persistently high domestic interest rates—may present attractive 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 recovery sessions during the remainder of July must demonstrate strong "bottom-fishing" demand.

In the base medium-term case: Conversely, if net selling pressure from foreign investors persists and domestic interest rates continue to rise—thereby dampening market liquidity—the VN-Index may lack fresh, positive capital inflows. It would likely trade sideways within the 1,750–1,850 point range during the second half of 2026. Weakness in the VIC and VHM stock groups could cause the VN-Index to retest the lower bound of the previous sideways range—around the 1,580–1,600 point level. Additionally, renewed geopolitical tensions between Iran and the US, combined with the likelihood of the Fed maintaining high interest rates, could reinforce this negative scenario by pressuring exchange rates and foreign capital flows into emerging markets like Vietnam.

Strategy: Investors can capitalize on market corrections to deploy capital incrementally while maintaining a reasonable cash position for risk management, remaining ready to increase exposure once a market recovery trend is confirmed. Investors should avoid using leverage (margin) to "catch the bottom," as the market may form a secondary low. Furthermore, technical rebounds offer opportunities to restructure portfolios by divesting from companies that are underperforming relative to expectations.