HÀ NỘI — The market closed another challenging week with the benchmark VN-Index posting its fourth consecutive weekly decline and falling below the key 1,800-point threshold, as weak cash flow and persistent foreign selling continued to weigh on investor sentiment.

Despite the short-term weakness, several analysts said Việt Nam's macroeconomic fundamentals remain supportive and the market could enter a consolidation phase before regaining growth momentum in the second half of the year.

Last week, the VN-Index on the Hochiminh Stock Exchange (HoSE) ended at 1,791.65 points, down 2.57 per cent from the previous week. 

Liquidity continued to fall. Total trading value on HoSE reached approximately VNĐ79.2 trillion (US$3 billion) during the week, down more than 13 per cent from the previous week and marking the third consecutive weekly decline.

In several recent sessions, trading value on HoSE hovered around only VNĐ10 trillion, significantly lower than the average levels seen in the early months of the year.

The sharper decline in liquidity compared with the index itself suggested the market had entered a low supply-low demand phase, with existing shareholders reluctant to sell aggressively while new capital remained on the sidelines.

Foreign investors maintained their selling trend, offloading roughly VNĐ2.6 trillion on the southern bourse. 

According to analysts at SSI Securities Corporation (SSI), foreign investors sold a net VNĐ65 trillion worth of Vietnamese equities in the first five months of 2026, equivalent to nearly half of the total net outflows recorded in all of 2025. 

The proportion of foreign trading activity also declined from around 13 per cent to 11 per cent of total market liquidity.

SSI attributed the trend to relatively high domestic interest rates, attractive yields on US Treasury bonds and global capital flows favouring markets benefiting from themes related to artificial intelligence and semiconductors.

Although the market has been correcting since May, analysts said valuations have become increasingly attractive.

Many stocks have returned to price levels seen at the beginning of 2026. Several property and industrial park shares have even fallen back to levels last seen during the market volatility of 2025.

According to SSI, the VN-Index is currently trading at a forward price-to-earnings (P/E) ratio of around 13 times. Excluding Vingroup-related stocks, the valuation falls to approximately 10.3 times, significantly below historical averages.

However, analysts noted that valuation is no longer the main issue facing the market.

Geopolitical tensions in the Middle East, fluctuations in oil prices, inflation concerns and uncertainty surrounding global interest rates have prompted investors to remain cautious.

In contrast to the subdued market sentiment, SSI said Việt Nam's economic fundamentals remain relatively strong.

The firm forecasts GDP growth of 8.5-9 per cent in 2026, supported by public investment disbursement, foreign direct investment (FDI) inflows and institutional reforms in the second half of the year.

Disbursed FDI reached $9.75 billion in the first five months of the year, the highest level in many years. Meanwhile, public investment disbursement accounted for only 21.6 per cent of the annual plan, indicating considerable room for acceleration in the coming months.

SSI said the country's growth drivers are gradually shifting from consumption and exports toward investment, infrastructure development and capital market expansion, representing a structural change that could support long-term growth.

Market upgrading remains one of the biggest expectations for the second half of the year.

Việt Nam's inclusion in FTSE Russell's Secondary Emerging Market category from September could attract around $1.4 billion in passive inflows during 2026-27.

The projected amount is equivalent to roughly half of the foreign capital withdrawn from the market since the beginning of the year and is expected to support both liquidity and investor sentiment.

SSI maintained its base-case target of 1,920 points for the VN-Index in the second half of 2026, while its optimistic scenario projects the index could reach 2,120 points.

Nevertheless, the securities firm said the market may continue to trade within a narrow range in the near term until clearer signals emerge from capital flows and the broader macroeconomic environment. — BIZHUB/VNS