Policy support for private enterprises poised to drive Vietnam’s stock market

Amid global uncertainties and complex geopolitical shifts, financial experts believe that Vietnam’s new Resolution 68 on private sector development, signed by the Politburo on May 4, could become a significant catalyst for the domestic stock market.

Following a two-day policy meeting, the U.S. Federal Reserve (Fed) last Wednesday announced it would maintain its benchmark interest rate at 4.25-4.5%, a level unchanged since late 2024.

Fed Chair Jerome Powell emphasized the need for more time to evaluate whether the new U.S. import tariff policies could lead to higher inflation and unemployment rates. While unemployment remains low and consumer demand stable, the Fed stated that future rate decisions will hinge on new data, economic trends, and risk assessments.

Interest rates and exchange pressure

According to Vietnamese broker Vietcap Securities, with no clear signal from the Fed regarding a potential rate cut and with uncertainty surrounding U.S. tariff negotiations, the likelihood of a rate cut at the upcoming June meeting appears low. This could lead to short-term pressure on Vietnam’s foreign exchange market.

Nguyen The Minh, director of research and development for individual clients at another broker Yuanta Vietnam, noted that persistent high U.S. interest rates could exert pressure on the Vietnamese dong (VND) in the coming time. However, he believes the market has already priced in this scenario.

In fact, on Thursday, the VN-Index surged by 1.55%, marking its fourth-strongest rally in 2025. Foreign investors also registered four consecutive sessions of net buying (May 5-May 8) on the Ho Chi Minh Stock Exchange (HoSE), with total purchases exceeding VND1,357 billion ($52.23 million).

A key factor in the Fed's cautious stance is its wait and see approach to gauge how U.S. President Donald Trump’s tariff policies might influence inflation.

Resolution 68: A strategic shift

In the face of this global uncertainty, Minh views Resolution 68 as part of Vietnam's effort to restructure the economy, helping to mitigate the tariff impacts.

"In the coming period, we will rely on three key growth drivers to offset potential trade losses due to new tariffs: domestic consumption, private sector development, and public investment," Minh explained. “As the uncertainties related to the private sector increase, the government is expected to implement supportive monetary policies to further boost its growth.”

He added that developed nations have long recognized the private sector as a cornerstone of economic advancement. In Vietnam’s case, private sector conglomerates represent 60-65% of the stock market’s capitalization, a strong indication of their influence on market dynamics.

Market outlook: Stabilization and growth

Huynh Hoang Phuong, a financial analyst focused on Vietnam’s equity markets, echoed the sentiment, stating that Vietnam now holds a more advantageous position in tariff negotiations compared to April.

He expects the two sides to reach an agreement lowering tariffs to 25-28%, which could provide an additional boost to the VN-Index through fundamental analysis (FA) and industry-specific narratives.

“Though still in its early stages, the Vietnamese leadership’s pivot toward supporting the private sector represents a significant shift in mindset and regulatory environment - exactly the kind of structural catalyst that equity markets need.

“In the short term, diversification remains necessary, but volatility is declining. These domestic reforms offer hope and confidence for medium- and long-term investors looking to build wealth,” said Phuong.