Vietnam's stock market faces short-term pressure amid macroeconomic and geopolitical tensions

Factors such as armed conflict or interest-rate movements are cyclical and tend to have only short-term effects on the stock market. On the Monday session of 6-Apr-2026, Vietnam’s stock market closed with the VN-Index down by more than 9 points to around 1,675, marking the third straight session of declines.

Limited opportunities for short-term trading

On investor forums and groups, caution and even disappointment have spread. Many investors say they are reducing trading activity and mainly watching. Some are shifting toward savings as interest rates remain high at about 7%-9% per year.

Mr. Nguyen Tan Phong (Ho Chi Minh City) said his portfolio is down about 20%, mainly due to bank, stock, and real estate shares. He is not rushing to buy more to average down; instead, he moved 200 million VND into a 6-month term deposit yielding 7.5%-8% per year. He also noted that many investors are adopting a wait-and-see stance due to concerns that prolonged tensions in the Middle East and elevated oil prices could sustain inflation and weigh on the market.

Geopolitical risk remains a key determinant of sentiment. The VN-Index has not recovered as hoped, with ongoing conflict in Iran raising inflation fears. External investors have been net sellers since the start of 2026, suggesting limited near-term impact from any upgrade in market status.

Rates and valuation remain obstacles

According to economist Dr. Dinh The Hien, the rapid rise in interest rates is a major obstacle for stocks. Although the VN-Index has fallen sharply from the late-February peak near 1,900, the market’s P/E remains above 15x, which is not attractive.

Compared with 2023-2024, when bank deposit rates were around 5% and market P/E was 13-14x, current rates have risen notably. Vietcombank’s 1-year deposit rates can reach up to 7.9% per year, making stocks less attractive relative to risk-free yields.

Potential catalysts and company profit outlook

Nguyen Thanh Trung, CEO of FinSuccess Investment, said factors such as geopolitical tensions in Iran or fast-rising rates affect the market mainly in the short term and may ease in Q2 or later in the year.

He pointed to the expected FTSE Russell upgrade information, due to be announced on 8-Apr. He also cited a positive profit outlook for several leading firms, including: Hoa Phat, which anticipates roughly 40% net profit growth in 2026; FPT, targeting 15% business growth; PNJ and MWG, targeting 20%-30% gains; and banks such as MBB and Techcombank (TCB), aiming for double-digit growth.

“Although the market P/E is no longer cheap, it remains attractive in the long term. Two-digit growth over the next 3-5 years, along with supportive fiscal and monetary policy, will be the driver for a strong market recovery,” Trung said.

Capital needs and market development priorities

Huynh Anh Huy, Director of Equity Research at Kafi Securities, agreed that wars or interest rates are cyclical and have short-term effects. He said the sustainable growth driver for Vietnam’s stock market lies in the shift from speculation to a transparent, modern capital market where firms can mobilize long-term capital at cheaper costs than bank credit.

In the context of Vietnam targeting double-digit GDP growth in 2026-2030, capital needs are pivotal. The Ministry of Finance estimates total capital needs at about 38.5 quadrillion VND. The state budget is expected to cover roughly 20% (about 7.7 quadrillion VND), while the remaining more than 80% (over 30 quadrillion VND) would need to be mobilized from the capital market, where the stock market is expected to play an increasingly important role.

To meet this scale, Huynh Anh Huy emphasized the need for the stock market to grow in both size and quality. He highlighted pushing IPOs and listings, accelerating the equitization of large state-owned enterprises, and encouraging foreign-invested companies to list in Vietnam. He also noted that requiring VN100 beneficiaries to publish information in English from 2025-2026 is expected to reduce information asymmetry and boost investor confidence.

Regulators are also promoting domestic institutional investors (pension funds, insurance, investment funds) and diversifying products such as ETFs and open-ended funds to create more stable demand. “Policy and governance changes are the core factors that can elevate Vietnam’s stock market toward frontier markets. This process requires investors to be patient,” Huy concluded.

Investor sentiment: new issuance expectations vs. earnings dilution

Investor sentiment is a key factor supporting market confidence, but it is described as delicate. Nguyen Viet Quang, Yuanta Vietnam’s Head of Sales, said many investors hope that new share issuances will bring future returns. In practice, many firms raise capital to manage cash flow or strengthen finances, not necessarily to generate immediate profits.

This can dilute earnings per share (EPS) and limit stock price gains. When earnings cycles slow, sentiment can be affected, sometimes creating a feeling that expectations were overly optimistic.

Outlook: selective growth and forecast earnings improvement

On the positive side, Thiều Thị Nhật Lệ, CEO of UOBAM Vietnam, said the market is entering a selective growth phase with stronger sector differentiation than in 2025. She cited support from a stable macro backdrop, including double-digit GDP growth targets, controlled inflation, and continued fiscal policy driving large-scale public investment, which keeps firm profits positive.

UOBAM forecasts market-wide EPS growth of about 15%, focusing on banks, retail, materials, and companies benefiting from infrastructure spending. Structural factors—such as upgrading the market, improving transparency, diversifying products, and upgrading trading infrastructure—are expected to attract more long-term capital from international investors. Developing an international financial center is also described as a key step toward elevating Vietnam’s stock market.