Vietnam’s stable macroeconomic foundation provides long-term support for the stock market. However, in the short term, the market may still face certain pressures from foreign investor sentiment and the absorption capacity of domestic liquidity if external conditions turn unfavorable. The next phase of development will depend significantly on how quickly the objectives and expectations already set can be realized.
According to Dragon Capital’s October 2025 market report, the VN-Index reached an intraday all-time high of 1,794.58 points in October before slipping 0.7% by month-end (in USD terms). This correction mainly reflected profit-taking after a prolonged rally rather than any deterioration in fundamental factors.
Average daily trading liquidity stood at USD 1.4 billion, with more than 310,000 new accounts opened, the highest level in a year. Foreign investors continued to record net outflows of around USD 825 million during the month, bringing the year-to-date net selling value to roughly USD 5 billion. Domestic liquidity absorbed the selling pressure, indicating that local capital flows remain relatively stable, though the persistent foreign outflows remain a key factor to monitor. Global capital flows into emerging markets remain cautious, as relatively attractive performance in developed markets and ongoing geopolitical uncertainty continue to weigh on sentiment. Meanwhile, seasonal factors related to FDI profit repatriation have added pressure on the Vietnamese đồng.
Industrial production in October increased 10.8% year-on-year, while the PMI reached 54.4, signaling a recovery in both domestic and export demand. Public investment disbursement since the beginning of the year reached USD 24.3 billion, up 27.8% year-on-year, as infrastructure projects gradually moved from approval to implementation with steady progress. Disbursed FDI reached USD 21.3 billion, up 8.8%, the highest level in five years. CPI remained around 3.3%, creating room for the State Bank of Vietnam to continue implementing growth-supportive policies.
Corporate earnings results reflect the positive trajectory of the economic recovery. After-tax profit (PAT) in Q3 2025 grew 21.2% year-on-year, with revenue rising 7.2%. For the first nine months, PAT increased 22.4%, while revenue grew 9%. These results were driven mainly by improved profit margins and higher output rather than extraordinary financial income, indicating a recovery in core operations. The Financials and Industrials sectors remain the main growth engines, while clear signs of recovery in Real Estate and Consumer sectors are showing broader spillover effects. For the Top 80 stock basket, the base-case scenario forecasts PAT growth of 21% in 2025 and 17% in 2026, considered achievable given the improving quality of earnings and broader performance recovery beyond large-cap firms.
Public debt remains well-controlled at around 33% of GDP, creating favorable conditions for the government to further accelerate public investment. Capital market reforms are progressing positively, particularly with the reduction of the timeline from IPO to listing from 90 days to 30 days. In October, VPBank Securities (VPBankS) completed its IPO with a total value of USD 480 million, and the market is preparing for another major offering from VPS Securities. With an estimated USD 50 billion in enterprise value expected to list in the coming years, along with FTSE’s confirmation of Vietnam’s upgrade to Emerging Market status in early October and a clear roadmap toward potential MSCI Emerging Market inclusion before 2030, the shift from policy planning to practical implementation is showing rapid progress and tangible outcomes.
Global interest rates and exchange-rate pressures remain the two key risk factors that could influence foreign capital flows. Vietnam’s stable macroeconomic conditions provide long-term support for the market; however, in the short term, pressures may arise from foreign investor sentiment and domestic liquidity absorption if external factors move unfavorably. The next stage of development will depend significantly on the pace at which the set goals and expectations are realized.
Leave a Reply