Vietnam mining, banking, and finance stocks attract strong capital flow: analyst

Vietnam's stock market has seen a notable surge of capital into key sectors in the past three months, particularly mining, construction materials, banking, and finance, according to Tran Thang Long, director of analysis at BIDV Securities (BSC).

Speaking at the “Pho Tai Chinh” (Financial Street) talkshow, Long highlighted that from the start of the year through March, the VN-Index, which tracks the Ho Chi Minh Stock Exchange (HoSE), rose by approximately 5.5%. Average daily trading value ranged between VND22 trillion and VND23 trillion ($897.3 million), a solid figure compared to historical averages.

He attributed this growth to positive developments in the market outlook. First, business results for Q4/2024 showed significant growth compared to the previous year. Additionally, Vietnam has set a relatively ambitious GDP growth target of at least 8% for 2025, with the government implementing policies to stimulate business activity and support economic recovery. Notably, interest rates are trending lower and stabilizing, and the government is reducing and deferring certain taxes.

"Investors have a positive view of these policies and are optimistic about business outcomes, which is reflected in the market’s recent performance," said Long.

BSC's analysis showed that in the past three months, capital has flowed strongly into specific sectors such as mining, construction materials, banking, securities, and real estate. These five sectors have grown by approximately 9% to 19% since the beginning of the year, significantly outpacing the VN-Index's overall growth of around 5.5%.

The broker noted that these sectors are particularly sensitive to interest rate movements and domestic economic trends. Furthermore, they are less impacted by external factors than export-oriented industries.

Looking ahead, Long predicted a positive year for stock investors. BSC's base scenario forecasts the VN-Index to hover around 1,425 points, with a market P/E ratio of approximately 14-14.5 times and an estimated profit growth of 16% to 18% for listed companies.

This optimistic scenario is based on Vietnam's positive macroeconomic fundamentals, as well as expectations that the country’s stock market status may be upgraded by FTSE Russell, possibly by September 2025.

Additionally, the new trading system KRX, expected to go live by mid-year, will further boost investor sentiment and could lead to a more favorable valuation compared to 2024.

However, Long cautioned that some uncertainties remain. For example, foreign investors have been net sellers since the beginning of the year, offloading approximately VND16 trillion ($624.3 million) in the first two months of 2025. The ongoing global trade conflicts also pose a risk to the global economic outlook, which could impact related countries.

Capital flow shifting across sectors

Long expected the capital flow into Vietnam’s stock market to intensify, with clear signs already visible from the start of the year.

In the first half of 2025, certain sectors are expected to attract significant capital. These include those benefiting from the potential market upgrade or the completion of the KRX system, which will favor the securities industry.

Additionally, the banking, real estate, and materials sectors - dominated by large-cap stocks with high liquidity - are poised for further growth and are frequently included in foreign index baskets.

In the second half of 2025, capital may rotate into other sectors with strong profit prospects, such as retail, information technology, logistics, and industrial real estate.

Investors can adjust their portfolio strategies based on their risk tolerance and should consider holding 3 to 5 stocks from diverse sectors, Long said, adding investing in mutual fund certificates offers a safe and effective solution.