The VN-Index has surpassed its Q1 2025 peak of 1,340 points

In the third quarter, investors should focus on selecting undervalued stocks with strong potential, managing portfolios efficiently, and concentrating trades on the most promising opportunities.

The Fed Faces Mounting Pressure

The U.S. Federal Reserve’s caution is well-founded, given persistent inflation and high unemployment rates. Meanwhile, former U.S. President Donald Trump continues to urge the Fed to lower interest rates to stimulate economic growth.

Although controversial, the U.S.’s tax policies have achieved some short-term goals but also triggered instability both domestically and globally, casting a shadow over economic outlooks. Few international financial institutions remain optimistic about U.S. economic growth in the second half of the year.

Global stock markets, particularly in the U.S., are not fully reflecting ongoing geopolitical tensions, including Russia–Ukraine, U.S.–Iran, and India–Pakistan. Major indices such as the Dow Jones, S&P 500, Nikkei 225, and India's Sensex continue to show surprisingly positive performance.

Alongside supportive macroeconomic policies and signs of easing on tax fronts, central banks in Europe, the U.K., and the U.S. are in various stages of monetary easing. While the Fed has not yet cut interest rates in early 2025, one or two rate cuts could occur starting in September.

Vietnam’s Economy Gains Momentum in Q3

The third quarter is a critical acceleration phase for Vietnam’s economy. In May alone, public investment disbursement exceeded 22% of the total planned VND 880 trillion—one of the highest figures in the past five years. The government's timely support policies are also unlocking capital in the real estate market. Manufacturing, processing, and industrial production are all showing clear signs of recovery.

Foreign direct investment (FDI) disbursement is also picking up. Foreign investors returned to net buying in May after four consecutive months of net selling (averaging VND 9,000–9,500 billion per month). This trend appears reasonable as Vietnam’s stock market is expected to advance its market upgrade process in Q3 and Q4 2025.

Additionally, U.S.–China trade tensions may position Vietnam as an attractive destination for investment in industrial real estate, chemicals, port infrastructure, and more. Vietnam’s ongoing industrial transformation is likely to attract increased foreign capital into domestic enterprises, especially in manufacturing and industrial sectors, as well as renewed interest in the Vietnamese stock market. Notably, capital inflows from index-tracking funds and ETFs could further elevate Vietnam as a global investment hotspot.

Sector Focus: Where Should Investors Look?

Vietnam’s stock market now boasts over 10 million trading accounts. Market capitalization is on the rise, stock prices are recovering, and investor confidence is rebounding, especially as the VN-Index has surpassed its Q1 2025 peak of 1,340 points. A breakout to the 1,350–1,400–1,450 point range seems only a matter of time.

Given these favourable conditions, the financial and securities sectors remain top investment priorities. When markets enter a strong uptrend, these sectors often outperform. The growing number of investors and potential foreign net buying ahead of Vietnam’s market upgrade review could provide additional tailwinds.

Furthermore, the construction, building materials, and real estate sectors are also expected to thrive. Supportive policies, improved legal frameworks, and a strong push for public investment make these sectors strong contenders for top performance in 2025.

Meanwhile, information technology—driven by digitalization, cloud computing, virtual servers, and artificial intelligence (AI)—continues to offer attractive investment opportunities. Finally, port operations and oil & gas are also promising sectors that investors should closely monitor.