VN-Index Faces Multiple Challenges on Path to 2,000 Points

Interest rates, inflation, and cash flow are identified by experts as the three key factors shaping the stock market in 2026. Against geopolitical pressures and rising inflation, the VN-Index target of 2,000 points forecast by several organizations is becoming more difficult to achieve. In an online seminar titled “Map of cash flow in Q2 2026: What scenarios and opportunities for investors?” held on the afternoon of April 14, experts discussed the current market environment and outlined forecasts and investment strategy recommendations for the year.

Three variables to watch in 2026

Mr. Nguyen Duy Anh, Director of Portfolio Management at Vietcombank Asset Management Company (VCBF), said that interest rates, inflation, and cash flow are the main drivers currently influencing the market.

Interest rates: real rates and credit growth

Mr. Duy Anh noted that the real interest rate effectively competes with other investment channels. He said the State Bank of Vietnam and the government have stabilized benchmark rates, while credit growth in 2026 is expected to be lower than in 2025, which may limit near-term rate increases.

Inflation: oil prices and the 4.5% target challenge

On inflation, the expert said that concerns have intensified after the conflict in the Middle East pushed oil prices higher. He added that negotiations remain unclear and oil prices stay elevated, making it harder to meet Vietnam’s 4.5% inflation target given the country’s relatively large oil imports. He also said that when inflation is high, rate cuts become more difficult.

Cash flow: market upgrade signal and Q2 monitoring

Regarding cash flow, Mr. Duy Anh described the official upgrade to a higher tier as a positive signal for the next phases of 2026. For Q2, he advised investors to monitor whether tensions in the Middle East ease or escalate, alongside Q1 results and 2026 plans of listed companies. He said positive developments could improve market sentiment.

Geopolitical tensions: short-term volatility, long-term recovery

Mr. Vuong Khac Huy, Head of Analysis and Investment at Dai-ichi Life Vietnam, described the Middle East conflict as a wide-ranging event with an unpredictable end. He said information continues to interweave, creating strong short-term effects on investor psychology. For now, he advised investors to remain calm and focus on the longer-term picture.

He cited historical experience: over roughly 25 years of Vietnam’s stock market development, there have been nearly 15 similar conflict events (excluding larger shocks such as financial crises or COVID-19). He said these events typically cause volatility in the short term, but the market recovers and grows over the long term. He also noted that the market has delivered an average annual long-term return of around 12%, which he said can support investors’ commitment to their strategy.

Mr. Huy added that the conflict could still change long-term fundamentals, and investors should identify sectors and companies likely to be affected in order to adjust portfolios.

VN-Index at 2,000 points: plausible but challenging

Mr. Phung Minh Hoang, Strategy Director at PHFM, said that looking back to late 2025, profits could rise by 15–18% in 2026, which makes the 2,000-point target plausible. However, he said that as 2026 began, two headwinds—interest rate dynamics and geopolitical tensions in the Middle East—have weighed on the market, drawing a comparison to 2022 when rates rose sharply and oil prices surged due to the Russia-Ukraine conflict. As a result, he said the 2,000-point target remains challenging.

Market upgrade and expected foreign capital flows

A positive factor highlighted at the seminar is that Vietnam’s stock market was upgraded, effective from September 2026. Mr. Hoang said Vietnam could account for about 0.3–0.4% in FTSE Emerging Markets, which corresponds to roughly $1 billion in passive ETF flows. He said these flows would be deployed gradually over 1.5–2 years. He also estimated that active flows could be larger, at about $2–3 billion in the coming years.

Mr. Hoang said foreign capital has been continuously net selling for years, and the return of capital is expected to be a major driver for the market. He added that the upgrade also supports market reforms and could open the possibility of further upgrades to MSCI within about 3 years, potentially attracting an additional $3–5 billion.

Why foreign investors may not buy immediately

Addressing why foreign investors continue to net-sell despite upgrade prospects, Mr. Nguyen Duy Anh said that an upgrade does not automatically translate into immediate inflows. For passive funds, capital is allocated only when the market is officially included in the index, and the process is gradual. For active funds, he said early leadership in the upgrade narrative may lead some funds to take profits, while funds that have not invested before typically need time to research the market—usually 6 months to 1 year—before deploying capital.

He also pointed to a current constraint: the relatively small number of large, high-quality companies eligible for foreign investment. He said that if the government pushes IPOs of large firms soon, new supply could attract foreign capital. Based on this, he expects foreign money to gradually return to the Vietnamese stock market over the next 6–12 months.

Where capital could flow in Q2 and how to position portfolios

On the broader economy, Mr. Hoang said a target GDP growth of around 10% in coming years would be a major driver if achievable, but investment opportunities would likely be differentiated. He advised investors to prioritize large firms with strong access to capital or the ability to implement large projects aligned with development goals.

He added that the upgrade story is expected to attract foreign capital back, typically focusing on large, highly liquid firms. At the same time, he said recent geopolitical tensions create short-term shocks, and many good stocks could be oversold—potentially offering opportunities to rebalance toward companies with solid fundamentals and growth prospects.

Inflation risks and sector selection

Mr. Hoang said inflation risks remain, especially from potential El Niño effects in the second half of 2026 that could raise input costs such as electricity and food. He suggested prioritizing firms with strong inflation resilience.

Investment stance: phased buying rather than all-in

Agreeing that much negative information has already been priced in and valuations have become more attractive, Mr. Phung Minh Hoang said the current period could be viewed as a buying opportunity for investors holding cash. However, he cautioned against going all-in, noting that timing the bottom is difficult. Instead, he recommended diversifying and phasing in purchases.