Week 5-10/5: Breakthrough thanks to a series of good news

The trading week from May 5-10 marked a period of prosperity for the Vietnamese stock market, with the VN-Index increasing sharply by 41 points, equivalent to 3.3%, closing the week at 1,267.3 points.

The increase was recorded in the first 4 sessions of the week, before the market adjusted slightly in the last session of the week due to profit-taking pressure at the resistance zone of 1,270-1,280 points.

The Ho Chi Minh City Stock Exchange (HoSE) with a capitalization of about 200 billion USD recorded investors' excitement before a series of positive information both domestically and internationally.

One of the main drivers of the market is the launch of the KRX trading system on May 5. This event not only enhances the confidence of domestic investors, but also impresses international organizations, especially in the context of Vietnam's efforts to be upgraded to emerging market status by FTSE in September 2025. The positive sentiment from KRX has spread, helping to significantly increase market liquidity.

On the international front, the news that Vietnam officially entered the reciprocal tax negotiation round with the US from May 7 has contributed to improving market sentiment. This negotiation took place in the context that the US has just reached a trade agreement with the UK, imposed a basic tax of 10% and prepared to discuss with China in Geneva on May 10-11.

In particular, US President Donald Trump's statement about the possibility of reducing tariffs with China by 80% and revealing "many great deals" has created a positive effect.

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The results of the Vietnam-US trade negotiations will impact the stock market. Photo: HH

For Vietnam, the expectation of a reciprocal tax rate below 20% is considered an important factor in maintaining the competitiveness of exports, especially in industries such as textiles, seafood and electronics. These signals help reduce concerns about trade war risks, thereby supporting the growth of the VN-Index.

Vingroup stocks, including Vingroup (VIC), Vinhomes (VHM) and Vincom Retail (VRE), are the center of attention as they have increased sharply thanks to the news that Vinpearl plans to list 1.8 billion shares on HoSE on May 13.

The move is expected to boost liquidity and enhance Vingroup’s market position. Related stocks recorded an average increase of 5-7% during the week, contributing significantly to the overall growth of the index. In addition, Vingroup’s Q1/2025 business results showed a 134.4% increase in net profit over the same period, mainly due to the strong recovery of the real estate and tourism sectors.

The business picture of listed companies on HoSE in the first quarter of 2025 is also an important supporting factor. According to VnDirect Research, net profit of the whole market increased by 22.6% over the same period, with the electricity and real estate sectors leading the way, increasing by 223.9% and 134.4%, respectively. The recovery of domestic demand and the improved business environment have created a solid foundation for businesses.

However, the oil and gas group recorded a profit decrease of nearly 64.8% due to a 9% decrease in average oil prices, showing a clear differentiation between industries.

Forecast for week 12-16/5 and outlook for 2025

After a strong week of growth, the Vietnamese stock market is expected to face profit-taking pressure in the week of May 12-16, especially when the VN-Index approaches the strong resistance zone of 1,270-1,280 points.

According to Mr. Dinh Quang Hinh, Head of Market Strategy Department of VnDirect, positive information such as KRX and tariff negotiations have been largely reflected in stock prices. Without additional strong supporting factors, such as clear progress in Vietnam-US negotiations or the State Bank lowering interest rates, the possibility of surpassing the 1,280 point mark in the short term is not high.

In a positive scenario, if the trade negotiation results bring positive signals, such as the reciprocal tax rate below 20%, the VN-Index could challenge the 1,300 point mark.

On the contrary, if the market corrects, the support zone of 1,200-1,220 points will be an opportunity for investors to disburse into potential stock groups, possibly industrial real estate, seafood, and electricity, which have not increased strongly in the recent period.

SSI Research emphasized that cash flow can rotate between industry groups, short-term investors should maintain the stock ratio at 50-60%, avoiding using leverage to minimize risks.

Looking further, the outlook for the Vietnamese stock market in 2025 is positive but still depends on a number of key factors. VnDirect Research forecasts that the VN-Index will fluctuate between 1,230 and 1,520 points by the end of the year.

In an optimistic scenario, the VN-Index could reach 1,520 points if Vietnam reaches a favorable tariff agreement with the US, the Fed cuts interest rates 3-4 times and the State Bank loosens monetary policy. The FTSE's upgrade to emerging market status in September 2025 will also attract foreign capital.

According to the baseline scenario, the VN-Index could reach 1,350 points if Vietnam-US tariffs are at an acceptable level (below 20%), the Fed cuts interest rates twice, and the domestic economy continues to recover. In the negative scenario, the VN-Index could fall to 1,230 points if trade negotiations fail, high tariffs put pressure on exports, and foreign capital flows out of the market.

In terms of valuation, the VN-Index is currently trading at a forward P/E of 10.5 to 11 times and a P/B of 1.6 times, a significant discount to the five-year average. EPS growth of listed companies is expected to reach 12-17%, creating room for the market to grow. SSI Research believes that fundamental factors such as low valuations and attractive yields will continue to support the market during volatile periods.

What does it signal when Trump signs his first bilateral trade deal? This is the first agreement signed under the Trump administration's "bilateral negotiation" trade strategy, opening up opportunities for the US to reshape the global trade order. However, this also raises many concerns.

Source: https://vietnamnet.vn/he-thong-krx-va-dam-phan-thue-voi-my-cu-hich-kep-cho-san-200-ty-usd-2399925.html