Vietnam Insight

Key highlights:

The State Bank of Vietnam (SBV) issued Circular 50/2026, raising the LDR cap to 95% and introducing additional Basel III standards, which could expand banks’ lending capacity from December 2026.

Headline PCE in August increased 0.3% MoM and 3.4% YoY. The implied probability of a Fed rate hike at the October meeting fell to 38%, from 50% before the report was released.

According to the newly released proposal, PNJ plans to privately place up to 550 million common shares to professional securities investors, compared with 512 million outstanding shares, creating downward pressure on the stock amid dilution concerns.

Assessment: The trading week was relatively subdued, with no sector emerging as a clear market leader or providing a meaningful improvement in liquidity. Overall, a market breakout appears challenging as several large-cap stocks, such as NVL and PNJ, have experienced consecutive limit-down sessions. High interest rates continue to weigh on the market, while the lack of major catalysts ahead of 3Q26 earnings has contributed to increased market volatility.

Technical View: The VN-Index ended the week at 1,738 points, down 47 points (-2.66%), amid low trading liquidity. The index officially broke below its 50-day moving average (MA50) as banking and real estate stocks declined. Foreign investors recorded heavy net selling of approximately VND3.3tn on Friday, concentrated mainly in PNJ and HDB. Weak liquidity and already-fragile market sentiment could increase the likelihood of further downside. The reference support/resistance range is 1,720–1,880 points.

Investment Idea: Investors should prioritize defensive stocks with low beta, strong cash flows, high dividend yields, and low leverage in the current high-interest-rate environment. Insurance and utilities stocks could be considered. In the short term, the market could face further downside, so short-term traders should prioritize monitoring market developments and wait for clearer signals before taking positions.