According to SSI Securities Corporation’s semi-annual strategy report released on July 11, the VN-Index closed the first six months of the year at 1,376 points, its highest level in three years, marking an increase of 8.6 per cent since January and placing it less than 10 per cent below its historic peak recorded in early 2022.

Driving forces set scene for capital market momentum, Source: freepik.com/ AI-generated

The VN30 Index followed a similar path, ending June just 6 per cent below its record highs seen during the 2021–2022 period. Since bottoming out at 1,072 points on April 9, the VN-Index has mounted a robust 28 per cent recovery, supported by improving macroeconomic indicators and corporate earnings.

Driving this rebound were easing concerns over US trade measures and a notable earnings recovery in the second quarter. SSI Research reported that over 40 listed companies in its coverage universe posted average profit growth of 12.2 per cent on-year and 19.9 per cent on-quarter.

Market momentum was further bolstered by strong performances in real estate and banking stocks, with the Vingroup ecosystem playing an outsized role in enhancing investor sentiment.

However, SSI cautions that market volatility could resurface in the near term, particularly between July and early August, as the earnings reporting season coincides with profit-taking pressures. At the same time, the scope for additional monetary easing appears constrained, given that VND has already appreciated by more than 3 per cent in the first half of the year.

Adding to the cautious sentiment, early signs of pressure from US trade measures may become more evident in the third quarter, especially in export-oriented industries such as textiles, seafood, and industrial real estate.

Despite these short-term risks, SSI maintains a positive outlook for the remainder of the year, reiterating its target of 1,500 points for the VN-Index by end-2025. This projection is anchored on six core growth pillars: macroeconomic stability, strong domestic demand, sustained earnings growth, supportive exchange rate conditions, competitive market valuations, and increasing clarity regarding Vietnam’s anticipated upgrade to emerging market status.

On July 8, Dinh Minh Tri, director of Individual Client Analysis at Mirae Asset Securities, highlighted several key drivers behind the recent rally, including momentum surrounding the market upgrade narrative, solid GDP growth data for the first half, and favourable developments in tariff negotiations.

“These developments have drawn capital flows back to the market, helping the VN-Index surpass the 1,400-point threshold,” said Tri.

He noted that accelerating public investment disbursement is providing an additional boost to the economy.

“In tandem, securities stocks have become a magnet for foreign inflows. Should Vietnam secure a market status upgrade, trading liquidity would likely improve substantially. Proprietary trading portfolios of securities firms would also stand to benefit, especially given that current valuations in the sector remain relatively attractive,” Tri explained.

The market’s current strength comes after a sharp correction earlier this year. According to Vo Van Huy, head of Senior Client Services at DNSE Securities, the index rebounded, in large part thanks to proactive government measures supporting export activity, domestic production, public investment, and consumption.

“Both internal and external indicators continue to support a cautiously optimistic outlook for the second half of the year,” Huy noted.

While the prospect of US tariffs remains a potential overhang, most analysts agree that the direct impact on the stock market is likely to be limited. No formal measures have been enacted to date, and much of the associated risk appears to have already been priced into valuations.

A key development supporting market sentiment has been the return of foreign investors after two consecutive years of net capital outflows. Over just five trading sessions, foreign investors recorded net purchases exceeding $275 million.

Explaining this shift, Dinh Duc Minh, senior investment director at VinaCapital, pointed to growing signs of capital rotation away from US equities amid expectations of a slowing American economy, a weaker dollar, and declining interest rates.

In contrast, Vietnam’s equity market is benefiting from renewed optimism, particularly surrounding the likelihood of an upgrade to emerging market status.

“Assuming no major disruptions, Vietnam has more than a 50 per cent chance of achieving a market upgrade. Whether this takes place in September 2025 or March 2026, the anticipation alone is helping sustain positive sentiment,” Minh said.

He also recommended that investors focus more closely on domestic fundamentals, including credit growth, public investment, consumer demand stimulus, and tax relief measures.