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SGI Capital has published an updated macro and Vietnam stock market outlook highlighting shifting credit conditions, trade dynamics, inflation pressures, and evolving market liquidity and valuation patterns.
On May 4, 2026, Moody’s upgraded Vietnam’s long-term outlook from “Stable” to “Positive.” The agency also warned that credit rating risk could rise if leverage increases too far, potentially affecting macro stability. It also flagged the possibility that global tensions could hinder competitiveness and reduce the appeal for foreign direct investment (FDI).
SGI Capital noted that Vietnam’s trade deficit is widening, with the deficit exceeding USD 7.1 billion. It also cited a breakdown showing domestic enterprises accounting for USD 15.6 billion.
The report links part of the deterioration to price-driven spikes in fuel imports and faster imports of electronics and machinery from China. It also pointed to infrastructure investment and real estate, where imports are estimated at 20–40% of total investment, which could contribute to the trade deficit and create exchange-rate pressure going forward.
As a reference point, SGI Capital said the last time Vietnam recorded a trade deficit at a scale of about 10% of foreign exchange reserves in the first four months of a year was in 2010–2011.
Inflation rose sharply after March–April, surpassing 5.4%, which is higher than the target approved by the National Assembly. SGI Capital said Vietnam is seeking to stimulate investment and raise growth amid rising global commodity prices.
The outlook emphasizes inflationary pressure from demand as infrastructure investment expands and credit growth remains high, alongside cost-push pressures from rising oil prices and related products.
SGI Capital added that, over the past 15 years, it has been rare for inflation to exceed the policy rate (the tool used by the State Bank of Vietnam to steer market rates) as it does today. It expects these forces to amplify inflationary pressure and make it more persistent, potentially becoming a focal risk for monetary policy and asset markets.
SGI Capital described first-quarter 2026 results as very positive, with the non-financial sector growing at a record 77%. It said that, alongside the VN-Index rally, price-to-book valuations are approaching expensive territory, while price-to-earnings valuations remain in the neutral range.
However, the report said overall market valuations are being distorted by a small group of high-valued Vingroup stocks, which account for nearly one-third of total market capitalization. Meanwhile, the rest of the market has not attracted funds and continues to cheapen despite positive earnings.
SGI Capital said this pattern emerged in Q4 2025 and continued into 2026, indicating weakening capital inflows and a shift toward more short-term speculative sentiment. It warned that if investors do not align with this risk-on trend, generating profits over the next six months may be difficult.
On supply-demand balance, SGI Capital reported that foreign investors continued to net sell more than VND 10 trillion per month in the first four months of the year, despite FTSE’s upgrade of the Vietnamese market. It also noted that foreign funds have not retreated from other emerging markets in the region recently.
The report added that pressure from new issuances remains in Q1 and Q2 at a pace similar to late-2025, contributing to thinner liquidity and tighter market funds.
SGI Capital said issuance demand is expected to persist this year as the stock market rises, serving as a funding channel replacing credit avenues with limited room to grow and undergoing restructuring under new circulars. It reported that margin loan balances rose to record highs in absolute terms and as a share of market capitalization by end-Q1 2026, even as margin costs increased in line with general lending rates outside the economy.
The report said risks become more significant when major shareholders and corporate owners with deals at brokerages face liquidity strains in their core business—primarily tied to real estate—making debt repayment difficult and potentially triggering forced selling.
It identified the margin-lending rate environment and liquidity in the real estate market as early indicators to monitor this risk.
SGI Capital concluded that the market is entering a period with rising domestic and global macro risks, including inflation accelerating, the SBV actively tightening lending and mobilization operations under a draft circular, and the risk of a higher new US tariff amid ongoing investigations. It also cited the return of a large current account deficit, which could pressure foreign reserves and exchange-rate stability.
Against this backdrop, SGI Capital said the stock market will likely continue to face liquidity challenges and valuation discounts. It added that when speculative money targets a handful of highly valued stocks, the market may offer opportunities for businesses with solid earnings at cheaper valuations that are overlooked by funds. However, it said a truly large low-risk opportunity may only emerge once the major risks are fully priced into overall market valuations.
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