Banking, retail, oil sectors to lead Vietnam's stock market recovery: brokerage

Vietnam’s stock market could be led by banking, consumer retail and oil & gas stocks as the economy enters a new growth cycle, brokerage Vietcap said, raising its year-end 2026 target for the benchmark VN-Index to 1,955 points.

In a new strategy report, Vietcap said recent weakness in market liquidity was largely driven by investor caution amid elevated interest rates and geopolitical uncertainty stemming from tensions in the Middle East.

The brokerage expects trading activity to improve in the second half of 2026 if regional tensions ease, allowing investors to refocus on Vietnam’s macroeconomic outlook. It also identified the potential upgrade of Vietnam’s equity market by FTSE Russell during its September 2026 review as a key catalyst for investor sentiment.

Foreign investors net sold $2.4 billion worth of Vietnamese equities across the country’s three exchanges in the first five months of 2026, up 44% from a year earlier, according to Vietcap. The outflows reflected higher interest rates, elevated oil prices linked to Middle East conflicts and capital reallocation toward other markets.

Although overseas flows are expected to remain sensitive to geopolitical developments and domestic interest rates in the near term, the brokerage said Vietnam could begin attracting passive inflows tied to a potential FTSE market status upgrade as early as September.

The VN-Index has gained about 5% so far this year. Excluding the four Vingroup-related stocks - VIC (Vingroup), VHM (Vinhomes), VRE (Vincom Retail) and VPL (Vinpearl) - the index would have risen only around 0.3%, highlighting the narrow breadth of the rally.

As of May 27, the VN-Index traded at a trailing price-to-earnings ratio of 11.4 times after excluding Vingroup stocks, compared with its 10-year average of 14.5 times, suggesting valuations remain attractive for medium- and long-term investors, particularly if geopolitical risks subside.

Based on updated macroeconomic assumptions, Vietcap forecasts the VN-Index will reach 1,955 points by the end of 2026 and 2,280 points by the end of 2027. It also projects aggregate earnings of listed companies to grow 20% in 2026 and a further 17% in 2027.

The brokerage recommends increasing exposure to banks, consumer retailers and oil & gas companies to capitalize on synchronized economic growth.

For the banking sector, Vietcap forecasts earnings growth of around 18% this year and favors large lenders with strong asset quality and solid capital buffers, including CTG (Vietinbank), MBB (Military Bank), VCB (Vietcombank) and ACB (Asia Commercial Bank).

Under a more optimistic scenario in which Middle East tensions ease quickly and oil prices decline, the brokerage would also add TCB (Techcombank) and VPB (VPBank) to its preferred list, citing their relatively higher exposure to real estate lending and greater sensitivity to improving macroeconomic conditions.

Consumer retail remains an attractive long-term structural growth story, supported by Vietnam’s young demographics, rising disposable incomes and continued urbanization. These trends are expected to drive the expansion of modern retail formats, premium consumption and spending on healthcare and discretionary goods. Vietcap’s preferred stocks in the sector include MWG (Mobile World Investment Corporation), FRT (FPT Retail), PNJ (Phu Nhuan Jewelry) and MSN (Masan Group).

Meanwhile, the oil & gas industry is expected to enter a multi-year growth cycle as legal bottlenecks surrounding major projects are gradually resolved, encouraging capital investment and supporting rising energy demand.

Vietcap identified PVS (PetroVietnam Technical Services Corporation or PTSC) as one of the earliest and clearest beneficiaries of increased upstream investment, with the Block B gas project entering its peak implementation phase during 2026-2027 alongside the rollout of multiple engineering, procurement, construction and installation contracts.

The brokerage also expects Vietnam’s property sector to strengthen in the second half of 2026 as project launches accelerate and interest rates stabilize, naming KDH (Khang Dien House) and NLG (Nam Long Group) among its preferred developers.

By contrast, it maintains a neutral near-term view on securities firms, citing subdued market liquidity and macroeconomic uncertainties related to Middle East conflicts. Nevertheless, Vietcap remains constructive on the industry’s longer-term prospects, supported by sustainable earnings growth among listed companies, rising investor participation and continued development of Vietnam’s capital markets under government-led reforms.