Vietnam Outlook

Vietnam Dynamics 2H2026 – Stay defensive and Await the turn

Posted: Jul 23, 2026

In our Strategy Report published at the beginning of 2026, we argued that the VN-Index could head toward the 1,860 region in 1H2026. In 2H2026, we lowered our expectations on the view that a new, higher interest rate environment would gradually weigh on market liquidity, forecasting the VN-Index to reach 1,670 – 1,750 by the end of 2026. As of now, these forecasts have remained relatively accurate.
We currently maintain our view that exchange rate and interest rate risks will continue to weigh negatively on market liquidity in the final months of the year. However, we see a better profit growth outlook for listed companies than initially forecast, driven by sectors such as Oil & Gas (benefiting from oil prices), Construction Materials, Residential Real Estate and Industrial Real Estate (better-than-expected profit thanks to accelerated infrastructure projects).
We apply a valuation range of 13 – 13.5x P/E for 2026. Based on an expected profit growth of 18 – 19% for listed companies, we forecast the VN-Index to reach 1,770 – 1,850 by the end of 2026.
Given our cautious view on market developments in the final months of the year, amid rising interest rates, we favor stocks with clear profit growth, improving ROE, solid financial fundamentals, and valuations that remain in attractive territory.