Vietnam market rebound in May: Leading stocks begin to rally

A new wave of stock market gains appears to be forming in Vietnam, opening up promising investment opportunities for both institutional and retail investors.

Cautious market in April

In Q2/2025, Vietnam’s stock market is gradually regaining momentum following a sharp correction in April. Although last month began with considerable volatility, investors were still optimistic about a sustainable recovery cycle, driven by stabilizing macroeconomic policies and improving corporate earnings.

On April 3, Vietnam’s benchmark VN-Index dropped 88 points, marking its largest single-day decline since the start of the year. Investor sentiment was shaken by reports that the U.S. might impose reciprocal tariffs of up to 46% on Vietnamese exports, pulling the index below the key 1,100-point threshold. Despite this dip, the market stabilized in the following weeks.

Liquidity, however, remained subdued. Average daily trading value on the Ho Chi Minh Stock Exchange (HoSE) dropped over 13% compared to the previous month, reaching just above VND22 trillion ($847.7 million) per session. This reflected a wait-and-see approach as investors awaited clearer macro and policy signals.

Recovery wave gathers steam in May

Market sentiment improved in early May as the U.S. officially delayed its tariff enforcement by 90 days. Additionally, the launch of the new KRX trading system is expected to enhance market operations and further bolster domestic investor confidence.

Strong Q1 earnings from many listed companies have also set a solid foundation for the VN-Index to potentially reach the 1,250-1,280 range this month.

According to analysts at leading broker VPS Securities, this environment is creating investment opportunities across several key sectors. The chemicals industry has emerged as a standout, benefiting from upcoming VAT policy changes allowing input tax deductions from July 2025, which should significantly improve profit margins.

Notable players include DPM of Petrovietnam Fertilizer & Chemicals Corporation, which could receive up to VND170 billion ($6.55 million) in VAT refunds this year; and DGC of Duc Giang Chemicals Group JSC, which continues investing in its VND1.2 trillion ($46.24 million) Nghi Son chemical complex, while maintaining attractive dividends - solidifying its leading position.

Port and logistics companies are also gaining ground, driven by recovering global trade and domestic infrastructure expansion. Hai An Transport & Stevedoring JSC (HAH) is actively upgrading its fleet and securing long-term contracts, with projected revenue growth of 22% in 2025. Logistics heavyweight Gemadept (GMD) is expanding port capacity and enhancing operational efficiency, reinforcing its market leadership.

The industrial and construction materials sector is riding a new growth wave thanks to accelerated public investment. Surging demand for steel and building materials is fueling performance at leading firms. For example, steel giant Hoa Phat (HPG) is forecast to post Q2 profits of VND3.2 trillion. Industrial property developer Coteccons (CTD) is involved in major national projects such as the Long Thanh International Airport in the southern province of Dong Nai, with full-year revenue projected to see double-digit growth.

Despite the growth elsewhere, defensive sectors like power, water, and gas remain attractive for their stable income streams. Companies such as PV Power (POW), PV Gas (GAS), and Petrovietnam Power Nhon Trach 2 JSC (NT2) benefit from long-term contracts and rising domestic consumption amid economic recovery - making them safe havens during volatile periods.

The maritime transport industry also shows strong potential. The WTO forecast global trade volume to grow by 3% in 2025, with Asian exports projected to rise by 4.7%. Freight rates are rebounding due to rising demand and geopolitical factors, boosting both revenue and margins for carriers and port operators like Vietnam Container Shipping Joint Stock Corporation (VSC), HAH, and GMD.

VPS analysts concluded that positive signals from both domestic and global fronts are unlocking compelling opportunities this May. The market recovery is not only driven by technical factors but also backed by solid macro fundamentals and robust corporate performance.

Now is an opportune time for investors to restructure portfolios, prioritizing sectors with long-term growth potential, they noted.

The VN-Index rose 10.17 points, or 0.79%, to 1,293.43 points on Tuesday, marking an 18% increase from an 18-month low in early April when U.S. President Donald Trump announced steep reciprocal tariffs on most trading partners.

The trading value on the HoSE, on which the index is based, jumped 10% to VND23.90 trillion ($921 million).

Foreign investors were net buyers to the tune of VND977 billion ($37.65 million) on the major bourse. They mainly net bought VCB of state-owned lender Vietcombank and STB of Ho Chi Minh City-based lender Sacombank.