Stock market still has room to rally; Dragon Capital expert identifies two stock groups that could ride a new wave

With GDP growth stabilizing around 8–10% and potentially approaching two digits, an expert speaking at Dragon Capital’s Investor Day for Q1 said the stock market still has substantial room to grow. Dang Thanh Tung, Senior Director of Business, presented an optimistic outlook for the economy, the market, and sectors with potential in 2026.

Macroeconomic outlook and key drivers

The expert said the government’s 10% GDP growth target is well founded, supported by a growth base of about 8% from the previous year. He cited several ongoing drivers, including positive foreign direct investment (FDI) disbursement, public investment reaching a five-year peak, and trade turnover surpassing a record US$900 billion.

Monetary policy and interest-rate expectations

On monetary policy, he noted that while the current rate environment is no longer “very low,” it remains appropriate to support growth. Looking ahead, interest rates are expected to stay stable, with potential flexible adjustments depending on external developments. He added that if international factors—particularly geopolitical tensions—ease, domestic monetary policy could shift toward a more growth-friendly stance.

Risks and downside scenario

Despite the constructive baseline, the expert highlighted a key downside risk: a scenario in which oil prices remain elevated for 9–12 months. In that case, he said GDP growth could slow to around 8.5–9%. Even so, he argued the long-term growth trajectory remains intact, with a stable macro backdrop continuing to support the market.

Market implications and expected returns

The expert said the macro environment can underpin a recovery in stocks and an upward trend. While he acknowledged that macro risks persist and liquidity is not cheap—especially if rates rise—he said this is not entirely negative. If rates increase while the economy maintains solid growth, he expects the stock market to remain a beneficiary channel.

“With GDP growth maintaining around 8–10%, even approaching two digits, the stock market still has meaningful upside. Returns could reach 15–17%, depending on the industry and specific stocks,” he said. He added that equities remain a compelling option for higher profits for investors who do not want to rely only on savings.

Investment approach and sector focus

The expert said selecting stocks in the current period is not easy, particularly for individual investors, given both market risk and the challenge of identifying sectors or companies with superior growth amid many geopolitical variables. He therefore favored investing through funds, noting that fund managers can assess risk and select opportunities at the portfolio level.

On sector opportunities, he highlighted the banking group as a notable area due to its central role in driving credit growth and supporting the economy, which he said can help sustain stable growth. He also pointed to the consumer sector, saying it may not be ready for a short-term breakout, but is expected to benefit as the economy recovers and grows more sustainably in the period ahead.