Vietnam’s benchmark VN-Index could climb to 2,200 points in 2026 under a positive scenario, driven by strong earnings growth and sustained macroeconomic momentum, according to forecasts by JP Morgan.

In its latest report titled “Vietnam 2026 Outlook,” JP Morgan projects the VN-Index at 2,000 points under the base scenario. Under a more optimistic outlook, the index could rise to 2,200 points, driven by earnings growth supported by strong macroeconomic momentum.

The VN-Index previously reached a 25-year high of 1,766.85 points on October 16, following the announcement by FTSE Russell on October 8 that Vietnam would be upgraded to secondary emerging market status.

JP Morgan said Vietnam’s appeal goes beyond the upgrade, driven by major economic reforms that are lifting business and consumer confidence, as well as improving profit prospects over the next three to five years.

The report noted that economic reforms matter more than market reclassification for the long-term foundation of the stock market.

According to the largest US bank, 2025 marks a major turning point in Vietnam’s public policy agenda, with four key priorities, including strengthening the role of the private sector, streamlining the state apparatus, expanding public infrastructure and prioritizing research and development.

The reform package could usher in a period of strong economic growth and deeper financial development similar to the Doi Moi (Renewal) reforms of the 1980s, the report said.

Businesses are expected to benefit from the removal of legal bottlenecks in sectors such as real estate, infrastructure and gold trading, spillover effects from public investment and both direct and indirect government support for selected industries, along with incentives for research and development.

While most profit growth in 2025 is expected to be concentrated in real estate and banking, JP Morgan said market performance in 2026 is likely to be more broad-based as policy impacts become clearer through rising income and consumption. The bank therefore recommends increasing exposure to banking, consumer discretionary, industrial and materials stocks.

Despite maintaining a positive medium-term view on Vietnam, the report warned of potential short-term headwinds. JP Morgan said the recent market pullback, driven by reduced leverage among retail investors, could create buying opportunities.

In the past week alone, the VN-Index fell 94 points or 5.4%, ranking among the world’s sharpest equity declines.

Additional pressures include profit-taking outflows, withdrawals by frontier market funds ahead of inclusion in emerging market benchmarks, currency depreciation, elevated margin lending balances and interbank liquidity concerns.

The report also noted that a wave of capital raising, particularly by securities firms such as TCBS, VPS, VPBS and MBS, could divert market liquidity. JP Morgan recommended that regulators improve market access for brokers and global capital flows ahead of FTSE’s mid-term review in March 2026.