When the market no longer yields easy profits, which stocks will attract capital?

As valuations increasingly reflect reality, experts at a seminar by KB Securities Vietnam (KBSV) on April 10 discussed where capital may flow as the market becomes less likely to offer “easy profits.” The event, titled “Seizing opportunities amid market volatility,” highlighted public investment, banks, retail and securities as key destinations for investors.

No shortage of opportunities

Mr. Nguyen Xuan Bình, Head of Analytics at KBSV, said the market has gone through roughly three strong uptrends and three sharp downtrends from 2018 to the present. He noted the VN-Index appears to be trading within a sideways channel, with three peaks above and three troughs below.

He pointed to valuation movements across cycles. The most recent troughs in 2020, 2022 and 2026 show rising price-to-earnings (P/E) ratios of about 10, 11 and 12 times, while peaks in 2018, 2022 and early 2026 show P/E ratios of about 23, 19 and 15 times (excluding the Vingroup group). This pattern suggests the market’s trading range is narrowing, with peaks becoming lower.

According to Mr. Bình, this indicates valuations are increasingly aligning with intrinsic value. He advised investors to (1) select sectors and stocks by cycle and (2) combine mid-term investing with short-term trading. “If you only hold long term without rebalancing, even good stocks can lose effectiveness across cycles. FPT is a typical example,” he said.

On the near-term outlook, KBSV’s experts assessed that the probability of a breakout is higher than a sharp decline. They cited Vietnam’s growth room over the next 5–10 years and the government’s continued commitment to promoting growth.

Cause → Development: where capital may rotate

KBSV highlighted public investment as a favorable mid-term option. Previously, growth was driven largely by foreign direct investment (FDI), but FDI has not yet recovered strongly enough to be the leading engine. To achieve higher growth, Vietnam is expected to rely more on domestic drivers, particularly public investment.

Experts also noted that many stocks in this group have smaller market capitalizations or higher leverage, which may make them more suitable for short-term trading strategies.

For a mid-term “bottom-fishing” approach, KBSV recommended focusing on leading industry groups when negative information hits. The seminar pointed to retail, ports, logistics and technology—specifically companies with solid fundamentals and clear long-term prospects over the next 5–10 years.

Data/Stats: banking and retail as long-term growth anchors

From a long-term perspective, Mr. Tran Duc Anh, Head of Macro Economy & Market Strategy at KBSV, said two sectors appear almost certain to grow over the next 10 years: banking and retail.

For banks, he said Vietnam’s economy remains credit-driven, with credit growth often reaching 10–20% per year, supporting steady profit growth. He suggested investors focus on private, top-tier banks with strong technology, alongside state-owned banks that are more stable and safer.

For retail, he said consumption tends to rise with economic growth and the rapid expansion of the middle class, providing a clear long-term support factor, even if individual stocks may experience short-term volatility.

Impact: securities supported by market structure and rates

KBSV also drew attention to securities. Mr. Anh said opportunities exist in both the short and long term, supported by expectations that interest rates will stabilize or fall, which could support the stock market.

He also cited market participation: individual retail investors remain low, with only about 2–3% of the population actively trading. This, he said, implies substantial long-term growth potential. The government’s goal to develop the capital market to reduce dependence on banks was also mentioned.

Bank stocks: NPL risk monitored, not seen as alarming

During the event, an investor asked about Dragon Capital funds’ exposure to banks, particularly concerns about non-performing loans (NPLs) amid ongoing difficulties in the real estate market.

Mr. Vo Nguyen Khoa Tuan, Senior Investment Analyst at Dragon Capital, said selecting bank stocks is relatively easier than in many other sectors because credit demand remains healthy and banks’ net interest margin (NIM) generally stays stable.

He emphasized that NPLs are still a key factor to monitor, especially as interest rates have risen and this can affect real estate—an area closely linked to banks. He said the NPL trajectory depends on how much rates increase, how long the high-rate environment lasts, and government support policies. In the base case, rates are expected to stay around current levels unless inflation surges, so NPL risk is not considered alarming.

On real estate, Mr. Tuan said the market remains challenging but not pessimistic. He described the slowdown as normal in cycles, with transactions subdued in the short term as buyers wait for better prices. He pointed to positive signals including some firms planning strong sales growth and projects meeting real demand showing good absorption, suggesting investors should avoid blanket pessimism and instead differentiate by segment and company.

He also highlighted policy flexibility: in a volatile economy, the government is willing to accept higher risk to push growth. The new administrative apparatus is expected to accelerate policy implementation, helping the economy operate more smoothly and reducing the likelihood of shocks similar to those seen in 2022. These factors, he said, reinforce the view that systemic risk—such as bank NPLs—remains under control.

IPO deals: limited near-term upside, select cases may stand out

In response to questions about selecting IPO stocks, a Dragon Capital representative said IPOs and listings in late 2025 to early 2026 are unlikely to deliver strong short-term gains due to relatively high listing valuations. The representative noted that while some IPO stocks may rise on their first day, they often correct afterward, requiring a longer accumulation period before potentially rising again.

Still, the expert said some upcoming IPOs could be attractive if priced reasonably. One example mentioned was Dien May Xanh, a MWG unit, which contributes significantly to profits and still has growth headroom.