Experts forecast that domestic cash flows will continue to drive Vietnam’s stock market in June amid ongoing global uncertainties.

Local investor at a securities company in Hanoi. Photo: Pham Hung/The Hanoi Times

Vietnam's benchmark VN-Index gained 8.67% on a monthly basis to reach 1,332.6 points at the end of May.

The index has declined by nearly 1.3% since then to end this week at 1,315.49 points, partly due to unmet macroeconomic expectations.

According to Maybank Investment Bank (MSVN), the sharp recovery in May was largely driven by optimism surrounding macroeconomic policies, particularly positive government actions and a temporary pause in tariff tensions between the US and China.

These positive factors may be temporary and that the market remains vulnerable to external shocks that could cause unexpected volatility, the brokerage firm said in a recent report.

The company added that while the US CPI data for May came in below expectations, this does not necessarily indicate a sustainable decline in inflation. This is because current US inventories have yet to feel the direct impact of new tariffs.

Once those inventories are depleted, companies will need to import goods at higher costs, which will be passed on to selling prices, potentially driving inflation back up.

This situation could prompt the US Federal Reserve to maintain a cautious monetary stance and delay rate cuts, which in turn may lead to rising interest rates, the brokerage firm forecast.

Such developments would put pressure on global stock markets and weaken investor confidence in financial markets overall, including Vietnam, MSVN said.

"The market is entering a phase where confidence decreases a bit because macroeconomic policies have not yet had a tangible impact on the economy or corporate earnings," the company said.

SHS Research also said that the strong rally in May has already priced in most expectations regarding second-quarter earnings and macro policy support.

The market in June may witness profit-taking pressure from short-term investors, particularly as the VN-Index approaches the 1,340–1,350 threshold, it predicted.

"This short-term correction could pose risks for overheated stocks, particularly in sectors such as real estate, construction, and industry."

According to Yuanta Securities, the market may undergo short-term corrections before resuming its long-term upward trend. 

Large-cap stocks, particularly those in banking, essential consumer goods, and sectors that benefit from public investment, may experience steady long-term growth. 

Growing divergence between stock groups

There will be growing divergence between stock groups as investors shift their attention toward mid- and small-cap stocks after blue chips, especially VN30 companies, led the rally in May. 

This reflects a shift in investor sentiment, with some seeking stocks that are less sensitive to macroeconomic factors yet still offer strong second-quarter earnings potential.

According to SSI Research, real estate, construction, and public investment-related stocks may remain appealing, especially as the government ramps up infrastructure projects and creates favorable conditions for participating companies. 

The company listed KDH, NLG, DXG, and NVL among the ones that may perform well thanks to advantages in infrastructure and industrial real estate.

SHS Research also recommended that investors keep an eye on these stocks, as they show promising second-quarter earnings potential, and benefit from government support policies.

The sectors that are less affected by market swings, such as pharmaceuticals, utilities, and essential consumer goods, may still draw investor interest.

These stocks are typically more resilient to market fluctuations and offer stable earnings, such as VNM, SAB, HPG, PLC, and CII.

In the absence of strong growth momentum from VN30 stocks, Yuanta Securities suggested that these defensive plays may be attractive options for long-term investors.

The energy sector, particularly oil and gas exploration companies, may continue growing, bolstered by signs of recovery in global oil prices.

These stocks, including GAS, PVD, and PVS, will likely remain attractive in this environment as long as global energy demand remains strong.

On the opposite side, export-oriented and industrial stocks may face short-term challenges.

Global trade tensions, particularly between the US and China, could weigh on the likes of textile, seafood, and export-related stocks.

MSVN forecasted that global interest rates may remain high in the coming months, which would make it more difficult for export businesses to manage costs and pricing.

Yuanta Securities suggested that June is a good time for investors to focus on analyzing and selecting stocks with solid fundamentals and limited exposure to external risks. 

The key opportunities are expected in real estate, infrastructure, banking, and essential consumer goods. 

The brokerage firm noted that investors should pay caution to export-related and industrial stocks due to tariff-related pressures and global uncertainties.

Domestic capital is expected to remain the main driver of the market, though the divergence between stock groups is becoming more pronounced.

Therefore, investors are encouraged to be patient and strategic. They should prioritize stocks with strong fundamentals and solid Q2 earnings prospects.

Investors should also closely monitor global macroeconomic developments and adjust their portfolios accordingly.