Vietnam Insight

▶ The market rallied strongly in the first trading session of the week, led by the Vingroup-related stocks, with VIC and VHM contributing 18 points out of the VN-Index’s total 20-point gain. Positive news regarding Vietnam’s potential market upgrade over the weekend boosted investor sentiment from the opening bell. A notable positive development was that liquidity remained robust for the second consecutive session, with total trading value reaching VND 20 trillion. However, the market’s advance lacked broad-based participation, as most of the index gain was concentrated in VIC and VHM, while the majority of other stocks recorded only modest movements. Foreign investors also reversed course and returned to net buying, although the net inflow remained relatively modest.

▶ At the close, the VN-Index increased by 20.68 points (+1.17%) to 1,788.78 points, while the HNX-Index declined by 0.88 points (-0.31%) to 283.19 points. Total trading value across the three exchanges reached VND 20.8 trillion, equivalent to approximately 967 million shares traded. Foreign investors posted net purchases of VND 180 billion, led by HPG (+VND 106 billion), VIC (+VND 83 billion), and VPB (+VND 67 billion). On the other hand, the most heavily net-sold stocks were VCB (-VND 58 billion), DCM (-VND 41 billion), and BVH (-VND 38 billion).

▶ Technical perspective: Following a series of positive FTSE-related developments over the weekend, investor optimism spread rapidly from the start of the session, enabling the VN-Index to open nearly 18 points higher with significantly improved liquidity. However, as the index approached the 1,790–1,810 resistance zone, profit-taking pressure intensified, causing gains to narrow and intraday volatility to emerge. In our view, this development should not be interpreted as a negative signal. Market consolidation and the absorption of selling pressure around the resistance area are necessary to ease excessive optimism and build a stronger price foundation for the next upward move. In the coming sessions, if liquidity continues to improve and capital inflows remain supportive, the VN-Index is expected to retest the key psychological resistance level of 1,800 points in the near term.

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.