Expert view: Q2–Q3 is a favorable period to ride the upgrade wave; opportunities emerge in deeply discounted sector groups

VN-Index surpassed 1,750 points during the week of April 6–10, but experts said the market has not yet confirmed a broad, sustainable uptrend. They advised investors to remain cautious and selectively allocate capital to stocks with solid fundamentals and attractive valuations.

Weekly performance and market momentum

During the five-session period, the VN-Index rose in 3 out of 5 sessions and reclaimed the 1,750-point resistance by the week’s end. The week closed with the VN-Index gaining 66 points, equivalent to a 3.92% increase versus the previous week.

One notable move occurred mid-week, when the index surged by 79 points, or +4.71%. Analysts linked the rally to positive regional developments, including FTSE Russell’s decision to officially upgrade Vietnam to emerging market status, as well as progress toward negotiations among Middle East regional players.

What experts say about the 1,750-point milestone

Tran Quoc Toan, Director of Branch 2 at Mirae Asset Securities (MAS), said 1,750 points is an important stepping stone, but caution remains. While technical signals are encouraging, he emphasized that investors should monitor whether the market can confirm a durable long-term uptrend.

He also highlighted that a sustainable rally should be supported by liquidity—specifically, a steady increase in trading volume that suggests real money is entering the market rather than short-lived rebounds.

Key factors to watch: geopolitics and liquidity

Geopolitical developments in the Middle East were identified as a key variable. If a ceasefire is achieved, oil flows through the Hormuz Strait normalize and shipments resume, which could support a more sustainable move higher. Conversely, continued conflict could keep volatility elevated.

Liquidity conditions were also flagged as critical. Experts said the market’s ability to maintain gains will depend on whether trading activity continues to broaden rather than fade after the index breaks above 1,750.

Valuation backdrop and market outlook

Market commentary noted that the VN-Index’s price-to-earnings (P/E) ratio is around 14.5x, close to the five-year average. This valuation level is cited as a basis for maintaining a positive near-term outlook, supported by projected profit growth across the market.

FTSE Russell upgrade and potential timing for foreign inflows

FTSE Russell’s upgrade from frontier to emerging market status is increasingly viewed as a core growth driver for Vietnam’s market this year. The Mirae Asset team noted that foreign capital often leads by about 3–6 months ahead of upgrades in other recently upgraded markets, suggesting that Q2–Q3 2026 could be a “golden” period for foreign inflows returning to Vietnam.

If that pattern holds, capital would likely shift toward large-cap, highly liquid stocks that still have foreign ownership headroom. ETF trackers and active funds may also participate, potentially bringing more stable, long-term capital to the market.

From this perspective, the upgrade is not expected to be only a short-term trading catalyst; the expectation is a qualitative shift over a longer horizon.

Earnings support and sector dispersion

In addition to the upgrade narrative, Q1 2026 earnings results were cited as support for the market. Earnings broadly improved with sector dispersion. Banks are expected to maintain profitability through NPL control, cost optimization, and double-digit loan growth. Retail may stand out as consumer demand recovers, while energy benefits from accelerated national projects.

Some stocks in real estate and securities were also mentioned as potential contributors, particularly those whose fundamentals have improved after a deep correction.

Investment approach and risk management

Experts said opportunities remain, but investors should adopt cautious trading. Recommendations included limiting margin use and keeping a cash portion around 30% of the portfolio.

“Investors can also seek opportunities in sectors or stocks with positive earnings growth prospects that are trading at deep discounts, aligning valuations with the market’s overall trajectory,” the analyst advised.