Dragon Capital analyst recommends diversified investment channels with potential 15-17% returns, rather than keeping all money in bank deposits

At the Q1 Investor Day organized by Dragon Capital, Dang Thanh Tung, Senior Vice President of Corporate Advisory, said Vietnam’s economy is facing a “test” from energy markets as oil prices rise to around $100–$110 per barrel. He described the shock as global, adding that Vietnam can manage risks relatively well through diversified supply from regional partners including Japan, Korea, and Singapore.

Energy-market pressure and supply stability

Mr. Tung said stabilizing operations of the Nghi Son Refinery—supplying about 35% of Vietnam’s gasoline and diesel—has helped reduce the risk of supply-chain disruption. He also pointed to tools from the Fuel Price Stabilization Fund as a factor supporting supply stability.

Key macro risks and the outlook for 2026

The main challenge, he said, is the possibility that oil prices remain high for 9–12 months. In that scenario, inflation could approach 4.5–5% and GDP growth could slow by 0.5–1 percentage point. Despite these risks, he noted that inflation remains in check and Vietnam’s long-term growth trajectory continues to rank among the region’s leading economies.

Looking ahead to 2026, Mr. Tung said the government’s 10% GDP growth target has a practical basis, supported by last year’s 8% growth. He cited momentum from disbursement of FDI, public investment reaching a five-year high, and export-import turnover exceeding $900 billion. He added that even if external factors push growth down to around 8.5–9%, the long-run growth path would remain intact.

Fiscal space, interest rates, and exchange-rate stability

On financial variables, Mr. Tung said policymakers still have ample fiscal space to support growth through higher public investment and tax relief.

Regarding interest rates and the exchange rate, he said Vietnam faces pressures from the Fed’s tightening cycle and its position as a net energy importer. However, he expects the dong to remain relatively stable, with only 1–3% volatility. While current rates are not “cheap,” he said they are at a level that supports growth, and that rates are likely to stay stable with room for flexible adjustments depending on external developments. He also noted that if international factors—particularly geopolitical tensions—ease, domestic monetary policy could shift toward a more growth-supportive stance.

Equities outlook and portfolio implications

Mr. Tung said stocks still have room to rise, but asset allocation should be tailored to each investor’s risk tolerance. For investors with higher risk tolerance, he said equities remain an attractive partial allocation as valuations have become more appealing and the long-term outlook for Vietnam remains relatively clear through 2030.

For investors prioritizing capital preservation or seeking steady income, he said deposits or bonds may be more suitable in the near term. Still, he emphasized that equities should retain a meaningful weight in any portfolio because they are directly linked to economic growth, even in a path with some volatility.

Potential stock-market upside

In an environment where interest rates trend higher and money is not cheap, Mr. Tung said rate hikes do not necessarily lead to negative outcomes if the economy sustains strong growth. He stated: “With GDP growth maintained at about 8–10%, the stock market still has significant upside, not only double-digit but potentially 15–17% depending on the sector and specific stocks.”

He concluded that for investors seeking higher returns than savings channels, Dragon Capital experts view stocks as the optimal choice.