Analysts say VN-Index's 2,000-point target remains feasible

At the “Money Flow Map Q2/2026” program organized by Finhay Securities, Nguyen Duy Anh, Portfolio Management Director at Vietcombank Fund Management Company (VCBF), said three factors are shaping market performance in Q1: interest rates, inflation, and liquidity.

Interest rates: funding costs rise after a low-rate period

After a prolonged period of low rates, Vietnam’s funding cost increased sharply from late 2025. Deposit rates that previously hovered around 5–6% per year have moved to about 7–8%, with some banks above 8%. This shift makes savings channels more attractive and intensifies competition for riskier investments such as stocks and real estate.

The rise is attributed to sustained high credit growth over many years while mobilized funds lag behind, prompting banks to raise rates to balance funding and maintain safety indicators. With a more cautious policy approach from authorities, the rate level is expected to stabilize in the near term and not rise significantly beyond current levels.

Inflation: oil price pressures limit rate-cut room

Inflation has not yet become a heavy pressure early in the year, but geopolitical tensions in the Middle East have pushed oil prices higher, increasing inflation risks. As Vietnam is dependent on energy imports, the country could be significantly affected if oil remains elevated for an extended period, making the 4.5% inflation target harder to achieve.

In that context, there is limited room to cut rates.

Liquidity: sentiment improves after upgrade-related news

The third factor is liquidity flows. Before the upgrade, concerns about the upgrade process and foreign net selling were present. After the announcement of upgrade news, market sentiment improved, supporting more positive expectations for the remaining phases of 2026.

What to watch in Q2

For Q2, experts recommended that investors closely monitor developments in Middle East tensions, which could affect short-term market psychology as well as Q1 results and corporate plans for 2026. If firms maintain growth and present positive plans, market confidence is expected to strengthen.

Upgrade momentum: capital inflows, but the 2,000-point target remains challenging

Vuong Khac Huy, Head of Analysis and Investment at Dai-ichi Life Vietnam Fund Management (Dai-ichi Life Vietnam), said that upgrading is only the starting point. To pursue larger indices such as MSCI, the market will require systemic reforms in operations and transparency.

While global geopolitical conditions, particularly the Middle East conflict, may create short-term volatility, Huy said he remains optimistic about the long term: “Over 25 years, the market has withstood nearly 15 conflicts and many major crises. The prevailing trend is recovery with an average annual return of around 12%.”

Foreign capital estimates and the path toward index tracking

Phung Minh Hoang, Director of Strategy at Phu Hung Fund Management, noted that late 2025 the market expected the VN-Index to reach 2,000 in 2026, based on forecast earnings growth of 15–18%. However, early in the year, rapid rate hikes and geopolitical tensions made the outlook more difficult.

Hoang argued that there are still meaningful supports. Official upgrading to a secondary emerging market is expected to attract foreign capital in the near term. Vietnam could account for about 0.3–0.4% of FTSE’s index, potentially drawing about $1 billion from passive ETFs during the period from September 2026 and for around 1.5–2 years. Active capital could reach $2–3 billion in the coming years.

Because foreigners have maintained net selling positions for years, expectations of capital returning are viewed as an important mid-term driver. The upgrade path is also expected to create momentum for reforms and opportunities to move toward the MSCI Emerging Market standard within about three years. If achieved, the market could attract an additional $3–5 billion from index-tracking funds.

Outlook: positive medium- and long-term view, dependent on macro and liquidity

Hoang said that despite short-term challenges, the mid- and long-term outlook remains positive and that the 2,000-point target still has grounds for optimism, though it will largely depend on macro developments and liquidity going forward.