Invest in Vietnamese stocks with strong fundamentals amid downward trend, experts advise

Investors should maintain a reasonable portfolio to mitigate risks or selectively invest in leading stocks with strong fundamentals as Vietnam’s benchmark VN-Index may continue to decline in the upcoming sessions, say experts.

The VN-Index, representing the Ho Chi Minh Stock Exchange (HoSE), closed the second trading week of 2025 at 1,230.59 points, down 24.11 points, or 1.92%, compared to the previous week. The average trading value on the HoSE reached nearly VND7.82 trillion ($308.24 million) per session, marking the lowest weekly level since May 2023.

Domestic institutional investors and foreign investors recorded net sales of VND440.7 billion ($17.37 million) and nearly VND1.07 trillion ($42.2 million), respectively. These two groups mainly net sold securities and information technology stocks. Domestic institutions’ net selling also focused on banking tickers, while they were steel, real estate, and food stocks for foreign investors.

Conversely, domestic individual investors made a net purchase of VND772.8 billion ($30.5 million), focusing on financial services, information technology, and basic resources sectors.

Truong Hien Phuong, a senior director at KIS Vietnam Securities, commented that the Vietnamese stock market sharply declined during January 6-10 due to the lack of positive supporting news.

The market received negative news such as the new U.S. President Donald Trump possibly imposing high tariffs on certain countries, potentially leading to retaliation and trade wars between the U.S. and major economies which could impact the global economy.

Although there was no specific information or clear impact from Trump’s policies, the market reacted negatively, drawing from past experiences of the U.S.-China trade war.

Furthermore, with Vietnam preparing for the nine-day upcoming Lunar New Year break, capital is flowing out as investors take a rest or reduce leverage, keeping liquidity at low levels. The ongoing foreign net selling (over VND6.2 trillion or $244.4 million since the beginning of 2025) has placed pressure on the VN-Index, causing a significant decline.

"At the current liquidity level, even light selling pressure is enough to cause a sharp drop in the main index," Phuong stated.

He recommended that investors focus on stocks in the industrial real estate, construction, steel, public investment, securities, and residential real estate sectors, as they are more likely to gain better than others.

Sharing the same view, Saigon-Hanoi Securities (SHS) noted that many stocks are priced attractively relative to their business fundamentals and long-term growth prospects. Therefore, investors should avoid panic selling when the VN-Index goes down to the range of 1,200-1,220 points and maintain a reasonable portfolio. They should selectively invest in stocks with strong fundamentals and those expected to continue growing, especially those of leading companies.

Meanwhile, Viet Dragon Securities (VDSC) predicted that the VN-Index may continue to decrease in the next sessions. The current downward trend has pushed the market into an oversold short-term territory, and it is expected to find support around the 1,215-1,225 point range, with a potential rebound to test supply levels.

Therefore, investors should slow down and observe supply and demand developments, taking note of the increasing market risks, the broker said, adding they need to keep their portfolio at a reasonable level to mitigate risks or restructure it to reduce exposure.

Similarly, Vietcombank Securities (VCBS) held that the decline in liquidity and strong selling pressure during the last session of the week signals that capital is gradually flowing out of the market in the short term, and the VN-Index may continue to decrease based on momentum in the upcoming sessions.

“Investors should proactively restructure their portfolio, reducing stock proportion to a safe level of 20-30% and patiently wait for clearer signals of a market bottom,” it recommended.