SHS Research: market needs more time to consolidate as fundamentals improve.

SHS Research said the market likely needs more time to consolidate as fundamentals improve. The brokerage values current market valuation as reasonable for long-term prospects, but it noted that short-term growth remains unclear, making near-term consolidation more likely until fundamental factors strengthen.

Q1 2026 macro picture: growth supported, but pressure builds

SHS Research’s Research Department reported that Q1 2026 GDP growth reached 7.83%, suggesting the economy retains relatively good absorption capacity despite shocks linked to conflict in the Middle East. However, with the government targeting double-digit growth for the full year, SHS said pressure on the remaining three quarters is considerable.

Consumption and inflation: retail sales rise, CPI pressure persists

On consumption, total retail sales of goods and services in Q1 increased 10.9% year over year. SHS Research cautioned that the rise may not fully reflect improvements in demand quality and could be influenced by high price levels.

Inflation pressures remain elevated. March CPI rose 4.65% year over year, the highest March reading in the last five years. SHS added that inflation is not expected to peak yet due to lags in the pass-through from production costs to retail prices.

Money market and banking: FX pressure and higher rates

In the money market, the USD/VND exchange rate faced growing pressure toward the end of Q1, reflecting a current account deficit of about $0.53 billion. At the same time, funding pressure returned in the banking system as listed rates reached 10% per year, the highest level in four years.

FDI and trade: inflows strengthen, domestic firms lag

On the positive side, FDI inflows continued to grow strongly. Total registered capital reached $15.2 billion, up 43% year over year, with about 70% concentrated in processing and manufacturing.

While Q1 2026 imports and exports grew 23% year over year, SHS Research said the domestic corporate sector recorded a 16.6% decline. The brokerage attributed this to the economy’s continued reliance on the FDI sector and limited competitiveness of domestic firms in the global supply chain.

Key risks and positive factors for April 2026

SHS Research highlighted several uncertainty risks at the start of April:

• Geopolitical tensions expanding globally, with a focus on the Middle East
• Credit growth slowing, with deposits and lending rates rising
• Narrowing trade flows and supply-chain disruptions
• High margin loan ratios and rising margin rates
• Energy crises and rising inflation affecting economic growth

Despite these risks, SHS identified positive factors:

• The economy shows resilience, with room to maneuver fiscal policy to support growth
• Market size, after a period of decline, is at a reasonable level relative to long-term potential

Valuation and market outlook: consolidation likely

By end-March 2026, market capitalization reached about $386 billion (roughly 75% of 2025 GDP). The VN-Index P/E was 13.8, while forward P/E was around 12.2, which SHS said is reasonable given long-term prospects and comparable to the region.

SHS also pointed to the earnings yield (E/P) of 7.3%, saying it is not attractive relative to savings rates. With short-term growth still unclear, the brokerage concluded that the market is likely to need more time to consolidate until fundamental factors improve.

What to watch in April 2026 and trading range

In April 2026, SHS said the market will monitor Q1 earnings results, FTSE re-rating mid-year, and inflation pressures, alongside rising costs affecting enterprises and the economy in Q2.

SHS expects the VN-Index to trade within a narrow range, with support near 1,600 points and resistance near 1,750 points. It said it is difficult to identify strong growth opportunities given the number of risk factors and uncertainties affecting the financial market.

The brokerage maintained a neutral stance, while cautiously considering value investing opportunities in quality companies with high dividend yields.