2025 likely a Big Year for Vietnam equity market performance: PYN Elite exec

The Vietnamese stock market is gaining good momentum, and this year could be a so-called Big Year for the equity market performance, writes Petri Deryng, portfolio manager at Finnish investment fund PYN Elite.

For three years, 2022-2024, the VN-Index moved sluggishly and recorded a decline of 15.4%. Now things are different. The stock market is gaining good momentum, and the pace may even accelerate further.

Based on the current fundamentals, this could turn into a so-called Big Year for the equity market performance. In such a case, the essential factors align, and the outcome is reflected in the market.

During PYN Elite’s history, we have experienced four Big Years – 1999, 2003, 2009, and 2012 – when the fund’s annual returns rose between 64% and 199%.

Why a Big Year is possible now:

- Government spending is boosting economic growth.

- Vietnam’s liquidity is ample, and the government is supporting bank lending.

- The uncertainty over Vietnam’s exports to the U.S. caused by tariffs has been resolved.

- Index provider FTSE is set to upgrade Vietnam’s market classification to emerging market status in October.

- Earnings growth outlook is strong: 2025 +32%, 2026 +19%.

- With such earnings growth, the 2026 P/E level is 11.1.

- The market rally has been highly concentrated, and rotation will fire up new stocks and sectors in motion.

In PYN Elite’s portfolio, we aim to maximize returns from our hot positions. We are also able to rotate positions, as the portfolio’s stocks have performed very unevenly this year. A strong rally naturally comes with high volatility, swings, and potential corrections.

In a note on July 25, Petri Deryng pointed out four factors that largely drove the strength of the Vietnamese stock market.

- A tariff agreement between the U.S. and Vietnam has been concluded. The published framework appears promising, even though the final, product-specific effective tariffs will be announced at a later stage.

- The timing of a potential FTSE upgrade this autumn has gained strong support from the ongoing modernization of the Vietnamese stock market, strengthening expectations for emerging market upgrade.

- The Fed is expected to start cutting interest rates within the next 6-12 months, which would be positive for Vietnam’s bond market and would also support expectations of a stronger dong.

- Vietnam’s economy has achieved 8% GDP growth, and the government remains highly active in supporting further growth through major infrastructure projects, VAT reductions, acceleration of real estate permitting, and increased bank lending.