HÀ NỘI — The Vietnamese stock market is undergoing a significant transformation, driven by institutional reforms, public investment, relaxed policies and the dynamic growth of the private sector.

This movement reflects a new phase as capital flows adjust after a period of robust gains.

Investors are becoming more cautious, emphasising fundamental factors such as corporate health and management direction. This shift represents a transition from short-term reactions to building long-term confidence in Việt Nam's economic growth fundamentals.

Despite foreign investors maintaining a net selling position, trading volumes have stabilised, indicating a restructuring of portfolios amid continued regional volatility. Experts suggest that enhancing corporate governance, improving information transparency and refining trading mechanisms will be critical to attracting foreign capital back into the market.

Đặng Thanh Tùng, associate director at Dragon Capital, viewed the current market adjustment as a normal phase that will contribute to sustainable development.

He noted that several supportive factors are emerging, such as the ongoing refinement of market criteria, public investment disbursement in the fourth quarter, and the US Federal Reserve's continued interest rate cuts.

The inflow of quality companies into the market is expected to align with long-term investment strategies focused on firms with substantial competitive advantages.

Lê Đức Khánh, head of analysis at VPS Securities, believed that a pause after four months of significant growth is reasonable. He advocated for a buy-and-hold strategy in the current market environment.

Analysts anticipate that capital flows at the end of 2025 and early 2026 will favour sectors benefiting from supportive policies, including banking, securities, public infrastructure investment, construction materials and real estate.

The financial and securities sectors, along with insurance, construction, energy and utilities, remain key focal points owing to attractive valuations.

Nguyễn Minh Trang, director of analysis at ACB Securities, emphasised that the banking sector continues to be the primary conduit for capital, with current valuations remaining favourable for long-term holding.

The real estate sector began to heat up in late 2024, particularly among large firms, and is expected to recover more uniformly in 2025-2026 as policies are eased.

Public investment and construction materials are highlighted as bright spots driven by rising domestic demand and falling raw material prices.

The retail sector is also poised for recovery as domestic consumption improves, making it less susceptible to exchange rate fluctuations and tariffs.

Bullish sentiment

Tùng added that the electronics, manufacturing and energy sectors will be new growth drivers.

According to Huỳnh Minh Tuấn, founder of FIDT Asset Management and vice chairman of APG Securities, Việt Nam is entering a period of strong growth, propelled by public investment, private sector expansion and digital transformation.

The GDP growth target for 2026-2030 is among the highest of the decade, supported by expanded credit and record public investment.

According to the General Statistics Office, the third quarter of 2025 saw the highest growth in years, with a low consumer price index (CPI) and stable credit and exchange rates setting the stage for the 2026-2030 period.

Recent resolutions from the Party affirm the importance of the private economy and digital transformation as foundational pillars.

Tuấn forecasts GDP growth of 8.3-8.5 per cent for 2025, with public investment exceeding plans and potentially increasing by 25 per cent in 2026.

Nguyễn Việt Đức, director of Digital Business at VPBankS Securities, believed this goal is achievable due to strong credit, a 17 per cent increase in exports, and robust public investment. However, 2026 may face pressure from tighter credit despite the continuation of strong public investment growth.

The upgrade of Việt Nam's stock market to emerging market status by FTSE is expected to be a significant turning point, attracting passive capital flows from global exchange-traded funds (ETFs) and bringing the country closer to MSCI standards by 2027-2028.

Between now and 2027, a wave of initial public offerings (IPOs) from major companies such as VPBankS, TCBS, VPS, Highlands Coffee and Bach Hoa Xanh is expected to generate new momentum.

Currently, market valuations are attractive, with a price-to-earnings (P/E) ratio of around 20 times, correlating positively with GDP growth.

FIDT predicts the VN-Index may exceed 2,000 points by 2026, with around 20 major IPOs on the horizon. Interest rates are expected to remain low at 5.2-5.3 per cent, supporting affordable capital for production and investment.

KB Vietnam Securities (KBSV) anticipated an overall market profit growth of 18.6 per cent in 2025, buoyed by loose monetary policy, strong public investment and support for the real estate sector.

The VN-Index is projected to reach 1,814 points by the end of 2025, with a P/E ratio of 16.7 times, close to the five-year average. However, risks related to a 40 per cent transshipment tax on domestically produced goods, if re-imposed, could negatively impact the market. — BIZHUB/VNS