Vietnam bourse plunge offers opportunity for long-term investors: expert

Vietnam's ongoing market pullback presents a buying opportunity for long-term investors, as many stocks have been discounted to attractive valuations, said Nguyen The Minh, head of research & development for retail clients at Yuanta Securities Vietnam.

Between March 31 and April 4, Vietnam’s stock market reacted negatively to President Trump’s announcement of a new wave of global tariff impositions, including 46% tariffs on imports from Vietnam.

Over the past week, Vietnam’s benchmark VN-Index, dropped 8.11% to close at 1,210.67 points. Foreign investors turned aggressive net sellers, offloading nearly VND9 trillion ($346.86 million) worth of shares, more than five times the previous week’s volume and triple the value, with heavy selling focused on tech giant FPT's ticker FPT and a series of banking stocks.

The market is currently experiencing turbulence due to tariff policy signals from President Donald Trump, causing sharp declines in global stock markets. How will this affect the VN-Index after the holiday break?

April 8-11 will be a critical period as markets await confirmation on whether President Trump will proceed with the previously announced tariffs. On Monday, markets were thrown into confusion following reports that President Donald Trump would delay the tariffs by 90 days. However, CNBC quickly refuted the claim, calling it “fake news”.

The coming days will serve as a key indicator for the stock market’s trajectory in the near term. In the short to medium term, the outlook for the VN-Index remains unfavorable. Many investors may lower their market expectations and adopt a more defensive stance. The market’s decline over the two sessions on April 3 and 4 has made investors more cautious, prompting them to reduce the proportion of shares. It may take time for investors to regain confidence.

Overall, a strong rebound in the VN-Index over the next one to five months or a return to the bullish investor sentiment seen earlier this year appears unlikely. From a technical perspective, the index would first need to reclaim the previous 1,300-point level.

Still, I expect that a potential agreement between Vietnam and President Trump could provide a significant boost to the VN-Index. In a Truth Social post, Trump described his phone call with Party chief To Lam as “very productive.” Vietnam is also the first country to receive such positive remarks from Trump on the platform.

In an optimistic scenario, the VN-Index may gradually climb back above the 1,300-point mark. A more cautious outlook suggests a potential V-shaped recovery. I’m inclined toward the latter.

From a technical perspective, many stocks have entered deeply oversold territory, with declines of around 20%. Clearly, investors are overreacting. Given such oversold conditions, I believe the market has a high likelihood of forming a short-term bottom.

Low valuations are also a key supporting factor. The trailing price-to-earnings (P/E) ratio of the VN-Index has fallen sharply and is currently hovering around 12x, while the forward P/E stands at approximately 10x. Normally, such levels in forward P/E often signal that the VN-Index may have reached a bottom.

In summary, I expect the market to open sharply lower on April 8 due to investor concerns over the global market downturn. However, given the aforementioned factors, I anticipate the VN-Index will narrow its losses by the end of the session.

Are there concerns that widespread margin calls and forced cross-collateralized selling could trigger a deeper market decline?

This is a present risk in the market. Many investors fear a scenario of widespread forced selling and cross-margin calls, reminiscent of the 2022 downturn. If such a scenario unfolds, the VN-Index could face a sharp decline. However, the year 2025 is shaping up differently in several key ways.

On tariffs, an early deal between Vietnam and the U.S. would serve as a positive catalyst for the VN-Index. Moreover, the Vietnamese economy now shows improved fundamentals, with ample liquidity and capital flows strong enough to absorb margin-call-driven sell-offs.

Another difference is that back in 2022, concerns over global economic risks were heightened by a deeply inverted yield curve. Today, the curve has turned positive, a signal that recession fears have largely receded.

The tariff announcement has weighed heavily on export-oriented sectors, seafood, and industrial parks. Do you think the outlook and valuations for these sectors need to be reassessed?

I believe valuations in these sectors will inevitably be affected by President Trump’s tariff policy, even under the lowest proposed rate of 10%.

Many companies in steel, seafood, textile, and other export-oriented industries are likely to be affected. The impact may not be limited to 2025, but could persist throughout President Trump’s entire term.

With additional tariffs in place, corporate revenues and profits will inevitably take a hit. On the demand side, higher tariffs are likely to push up prices, dampening U.S. consumer demand. As a result, valuations of these export-driven sectors will need to be reassessed.

Some industry insiders are hopeful that the government will roll out support policies for affected businesses like preferential interest rates to offset tariff-related costs. That’s why I believe the overall impact may remain manageable.

Do you think the recent market dips have opened up buying opportunities for investors, especially those looking to accumulate stocks for the long term?

Long-term investors can take advantage of market conditions like the current one. Market declines present good opportunities for those with a long-term vision. I believe the VN-Index still has a strong upward trend over the long run.

Therefore, the sharp correction of the VN-Index during the April 7 session should be seen as buying opportunities. In 2024, there were also times when the VN-Index dropped by as much as 8%, yet it rebounded strongly afterward.

While some investors are concerned that the new tariffs might have a long-term negative impact on the stock index, in reality, export-oriented companies to the U.S. do not make up a large proportion of the VN-Index.

The market downturn has led to lower stock valuations, and I recommend that investors consider disbursing capital based on several key criteria: selecting stocks in growth sectors (primarily serving the domestic market), with strong business outlooks, high dividend yields, and low debt ratios. Additionally, it’s important to avoid using margin leverage during this period.