Capital is pouring into Vietnam’s stock market, with foreign investors also returning to net buying

Vietnam's stock market rose on August 6, extending the previous session's rise. At the closing, the VN-Index soared 26.56 points (1.72%) to 1,573.71, while the VN30-Index gained 32.88 points (1.95%) to 1,723.31, both setting new all-time highs. Meanwhile, the HNX-Index increased 2.54 points (0.95%) to 268.66, while the UPCoM-Index remained unchanged at 107 points.

The market's rise indicates rising investor confidence, bolstered by robust inflows that drove several companies to their daily highs. The trade value on August 6 was significantly lower than the previous day, but it still topped VND 42 trillion. On August 5, total market liquidity across all three exchanges exceeded VND 85 trillion, a record for a single session in Vietnam's stock market.

Commenting on the market’s recent correction and rebound, Mr. Trần Hoàng Sơn, Head of Market Strategy at VPBank Securities (VPBankS), said the VN-Index may enter a new uptrend and could break above long-standing resistance levels such as 1,600 — or even 1,800. He sees the technical floor around 1,430–1,450 and forecasts at least 20% further upside.

According to Sơn, last week’s correction created opportunities for fresh capital to enter. During strong bull markets backed by ample liquidity and GDP growth targets of 8.3%–8.5%, sectors like banking could be major beneficiaries of credit expansion.

He advised investors to only partially take profits, as equities may continue rising post-correction. One key signal: during the recent dip of 60–70 points, market liquidity surged to around USD 3 billion — showing buyers are ready to enter at discounted levels. Such strong participation suggests the market is unlikely to face deep declines.

The market’s performance this week appears to support these insights.

Sơn recommended investors stay open-minded and view corrections as setups for the next rally. Volatility could widen, so he suggested waiting for any broader pullback by mid-to-late August as a potential buying window. For now, after a week of volatility, the market has posted a strong session with healthy liquidity — potentially establishing a new short-term base in early August before another rally.

Looking ahead to September, a long-awaited catalyst could arrive: Vietnam’s official upgrade by FTSE Russell from Frontier to Emerging Market status. “Such a reclassification would be a major trigger for the VN-Index to climb further in 2025,” he said.

Echoing this optimism, Mr. Huỳnh Minh Tuấn, Vice Chairman of APG Securities, noted that the recent rally has been driven primarily by large-cap stocks — particularly in finance and real estate — thanks to accommodative monetary policy, steady money supply growth, and mounting anticipation for a market upgrade.

Tuấn emphasized that the upgrade would provide a major psychological boost, attracting stronger foreign capital inflows.

From a valuation standpoint, he stated that the market remains inexpensive, with a current P/E ratio of roughly 13x, which is lower than the 5-year median of 14.5x. Corporate earnings per share (EPS) are predicted to increase by more than 20% this year.

By year-end, the 12-month trailing P/E is expected to decline to roughly 12x, indicating undervaluation and implying that the VN-Index has plenty of potential to soar beyond the 1,500 level. "Capital inflows remain robust and will likely continue targeting leading stocks," the economist said.

Tuấn's long-term outlook remains positive. He believes that Vietnam's favourable macroeconomic outlook, which includes high growth objectives and pro-growth monetary policies, would continue to drive capital inflows into the stock market.