ABS Research: Stock risk factors have declined significantly, making them suitable for mid-term positions. In the May strategy report, the ABS Research Analysis and Investment Department assigns a forward P/E for the VN-Index at about 13.4x, roughly in line with the long‑term average. Excluding the Vingroup group, the P/E stands at about 10.5x, still attractive for medium-to-long-term investment.
After strong Q1 growth, the real economy continues to expand in April with industrial production advancing for the 10th consecutive month (per the PMI) while the Industrial Production Index (IIP) rose 9.9% year‑on‑year.
ABS Research believes Vietnam will maintain strong economic growth in the coming quarters, targeting GDP growth of about 8.6% for 2026, with the main obstacles currently macro indicators such as inflation, exchange rate, and interest rates.
The most important factor the global markets are watching is the prospect of the United States and Iran reaching an agreement to end the conflict, which we view as highly feasible. As the Hormuz Strait is opened and with higher oil supply as observed recently from the US, UAE, and OPEC, markets expect global oil prices to fall significantly, easing inflationary pressures worldwide.
On this basis, major central banks could accelerate rate cuts. Falling oil prices reduce import pressure for fuels and production inputs, while weaker gold prices and a softer
USD (DXY) can help ease inflation, interest rates, and the exchange rate for Vietnam in the coming period, while improving demand and margins for Vietnamese goods.
In the stock market, the profit outlook for listed companies for the remainder of the year is expected to diverge. Higher production costs and elevated interest rates are likely to compress margins and sales, especially for highly leveraged firms using energy-related inputs and transportation. Banks’ net interest margins (NIM) are also under pressure due to funding structure and rising non-performing loans.
In terms of valuations, the VN-Index forward P/E is around 13.4x, in line with the long-term average. Excluding the Vingroup group, it is about 10.5x, still attractive for medium-to-long-term investment.
In May, many positive signals continue to enhance Vietnam’s market appeal to international capital, such as Moody’s upgrading Vietnam’s sovereign outlook from 'stable' to 'positive'. There is also talk that Vietnam could be added to MSCI’s Watch List in the June 2026 review, as Vietnam has met 10 of 18 market-access criteria and is actively improving the remaining ones.
Meanwhile, domestic money may improve as macro concerns ease. Additionally, if Circular 22 is amended with reasonable regulations and a practical implementation timetable, liquidity for the market could improve.
ABS Research presents two scenarios for VN-Index development in May 2026. In Scenario 1, the VN-Index quickly surpasses the old peak of 1,920 points, consolidates near the top with broad liquidity, and targets a near-term resistance zone around 2,084–2,145 points. In Scenario 2, if conflict in the Middle East persists and negatively affects global growth, the market could test the 1,750–1,800 support, seen as a strength test for the uptrend and a mild pullback within the uptrend.
According to ABS Research, stock risk factors have declined significantly, making it relatively safe to increase mid-term holdings while the market remains uncertain.
For short-term investors, trading frequency could increase based on existing support and resistance levels. Preference should be given to stocks that have formed bases and are rising in the near term. Companies with positive earnings outlooks, strong balance sheets, high dividends, fair valuations, and those likely to attract foreign capital when the market is upgraded are notable.
