Vietnam stock market to rebound on Fed rate hike ease: VinaCapital

Hanoi Stock Exchange in Hoan Kiem district, Hanoi. Photo courtesy of the government's portal.
Vietnam’s stock market is expected to recover when the U.S. Federal Reserve relents on its aggressive rate hikes, unlike most other emerging economies with current account deficits and huge U.S. dollar denominated debts, according to leading investment fund VinaCapital.
The Vietnamese stock market has sold off more than 20% to date, driven in part by the 21% correction in the S&P500, VinaCapital noted in a report.
The fund attributed the global stock market's downturn to the Fed’s efforts to rein in inflation, mainly driven by global supply chain issues, which exacerbated the already prevailing economic stresses caused by the Russia-Ukraine conflict and China’s Covid-related lockdown.
Some investors are concerned about the possibility of a “perfect storm” for emerging markets due to rising global interest rates, a nearly 10% year-on-year jump in the U.S. Dollar Index's value, as well as soaring energy and food prices.
However, Vietnam’s economy is more insulated from the current difficulties in the U.S. and Europe than in the past, largely because of policy decisions by the government to balance economic growth and stability, Michael Kokalari, VinaCapital’s chief economist, noted.
Though VN-Index is currently selling off along with global stock markets, the country's economy is in firm condition, owing to booming domestic consumption, which is equivalent to two-thirds of Vietnam's GDP. Consequently, the consensus expects the VN-Index earnings per share (EPS) to grow by nearly 20% this year, according to Bloomberg.
Vietnam's improved resilience puts it in a better position to deal with Fed rate rises than in previous rate hike cycles, as shown by global market turmoil's dampened impact on the U.S dollar/Vietnamese dong exchange rate, according to Kokalari.
Past episodes of global stock market volatility hit Vietnam hard, including the Global Financial Crisis in 2008, the Fed Taper Tantrum in 2013, and China’s 2015 depreciation of the Chinese yuan.
However, Kokalari believed that Vietnam's macroeconomy has several fortifications in place to significantly strengthen the country's resistance to the current escalating global economic storm.
In particular, Vietnam currently has nearly $100 billion in foreign exchange reserves, which is in line with the IMF’s recommended level, and its foreign currency denominated debt is below 40% of GDP, around half of which being "soft" loans payable to supranational lenders on concessionary terms.
Vietnam was ranked as the least vulnerable country to the Fed rate hikes and quantitative tightening this year, due to its modest debt levels, macroeconomic stability, and persistent current account surpluses, The Economist wrote in late 2021.
Moreover, the Vietnamese dong has depreciated by less than 2%, versus a 5% devaluation in the Chinese yuan, with inflation remaining modest, in stark contrast to most developed and emerging economies, VinaCapital noted.
Vietnam's year-on-year inflation rate is currently around 3%, with a 3.5% average forecast this year. VinaCapital expects the country’s consumer price index to peak at around 5.5% year-on-year in the second half of 2022, and then fall back to 4.5% by the end of the year.
It is also anticipated that the State Bank of Vietnam would not need to hike policy interest rates as inflation has been maintained at around 4%, in line with the government’s target. This is in contrast to its ASEAN emerging peers that are all raising interest rates or are expected to do so in the weeks ahead.
Finally, policymakers' strategy over the last decade shifted from tacitly condoning uncontrolled GDP growth to balancing macroeconomic stability and development, enhancing Vietnam's resilience to global economic storms, the fund noted.
- Read More
Vietnam aims to finalize negotiations for Ninh Thuan 1 nuclear power plant by August
The Vietnamese government targets completing negotiations for Ninh Thuan 1 nuclear power plant in former Ninh Thuan province (now Khanh Hoa) by August 2025, and for Ninh Thuan 2 by May 2026 at the latest.
Energy - Fri, August 8, 2025 | 4:18 pm GMT+7
Software giant SAP invests $175 ml in R&D center in Vietnam
German software heavyweight SAP has officially launched a research & development center in Vietnam, with plans to invest more than €150 million ($175 million) over the next five years.
Industries - Fri, August 8, 2025 | 3:43 pm GMT+7
Carlsberg’s $130 mln plant expansion in central Vietnam set to start brewing next month
The expansion of Carlsberg’s brewery in Hue city, central Vietnam, with an investment of over VND3.4 trillion ($129.66 million), has entered trial runs and is scheduled to officially come into operation in September, according to a Carlsberg Vietnam report.
Industries - Fri, August 8, 2025 | 2:43 pm GMT+7
Indonesia promotes nickel-based EV battery production
Indonesia is advocating regulations to encourage electric vehicle (EV) manufacturers to switch from the commonly used lithium-based batteries to nickel-based ones.
Southeast Asia - Fri, August 8, 2025 | 1:54 pm GMT+7
BRICS countries account for over 35% of Malaysia’s total foreign trade turnover
Malaysia’s trade with BRICS nations climbed to RM818 billion ($193.47 billion) in 2024, making up 35.2% of the country’s total global trade, according to the Ministry of Investment, Trade and Industry (MITI).
Southeast Asia - Fri, August 8, 2025 | 1:52 pm GMT+7
Vietnam consumer finance major F88’s stock hits ceiling price on UPCoM debut
The stock of F88 Investment JSC (F88), a leading consumer finance company in Vietnam, hit its ceiling price of VND888,800 ($34) on Friday, the first day of trading on the Unlisted Public Companies Market (UPCoM).
Companies - Fri, August 8, 2025 | 1:32 pm GMT+7
US tariff unlikely to dent Vietnam’s long-term FDI appeal: broker
The U.S. tariff gap between Vietnamese goods and those from four other Southeast Asian countries would not erode Vietnam’s competitive edge in manufacturing and investment, said Hanoi-based Vietcombank Securities (VCBS).
Economy - Fri, August 8, 2025 | 12:24 pm GMT+7
Land clearance for Vietnam's North-South high-speed railway project to start on December 19
Prime Minister Pham Minh Chinh has requested localities to start land clearance en masse for the gigantic North-South high-speed railway project on December 19.
Economy - Fri, August 8, 2025 | 11:52 am GMT+7
Vietnam might launch pilot digital asset exchange in August
A digital asset exchange might be launched in August on a pilot basis, Deputy Minister of Finance Nguyen Duc Chi told a government press meeting on Thursday.
Finance - Fri, August 8, 2025 | 11:25 am GMT+7
Vietnam’s steel giant Hoa Sen spends $34 mln on land near Long Thanh airport for urban development
Hoa Sen Group (HoSE: HSG), Vietnam’s top producer of coated steel products, has spent VND900 billion ($34.3 million) acquiring land for a major urban development project in the southern province of Dong Nai.
Real Estate - Fri, August 8, 2025 | 8:22 am GMT+7
Halal market presents major opportunities for Vietnamese businesses
The global Halal market is projected to reach $5 trillion by 2030, with Malaysia alone expected to hit $113.2 billion, said Shariza binti Abdul Rasheed, Halal product manager at Maybank Malaysia.
Economy - Thu, August 7, 2025 | 9:18 pm GMT+7
Steel major Hoa Phat to pour extra $130 mln into central Vietnam plant
Vietnam’s leading steelmaker, Hoa Phat Group (HoSE: HPG), will increase investment in its Dung Quat 2 iron and steel production complex by VND3.4 trillion ($129.7 million) as part of an expansion plan.
Industries - Thu, August 7, 2025 | 8:03 pm GMT+7
Vietnam’s army-backed construction firm proposes 14 offshore wind power projects
Lung Lo Construction Corporation (LLC), under the Ministry of National Defense, has submitted investment proposals for 14 offshore wind power projects with a combined capacity of 9,000 MW.
Energy - Thu, August 7, 2025 | 5:07 pm GMT+7
Vietnam's agri major Hoang Anh Gia Lai fined for bond information disclosure failure
Vietnam's agri major Hoang Anh Gia Lai JSC has been fined VND92.5 million ($3,528) for failing to disclose bond-related information as required by law.
Companies - Thu, August 7, 2025 | 4:31 pm GMT+7
Northern Vietnam province accelerates $2.2 bln LNG-to-power project
Quang Ninh province will hand over 4.9 hectares of reclaimed land to the Quang Ninh LNG-fuelled power plant project before August 11, local authorities stated at a meeting on Wednesday.
Energy - Thu, August 7, 2025 | 4:17 pm GMT+7
Vietnam's seafood firms ride profit wave ahead of US tariff hike
Vietnam’s seafood companies reported surging profits in Q2/2025, driven by importers ramping up purchases ahead of new U.S. reciprocal tariffs.
Economy - Thu, August 7, 2025 | 2:21 pm GMT+7
- Consulting
-
Navigating tariff shocks: Vietnam’s path forward through diversification
-
Southeast Asia IPO performance in Jan-June
-
Vietnam's fund management industry has chance to make breakthrough development: exec
-
Vietnam infrastructure spending surges 40%
-
Vietnam needs two-pronged policy approach to mitigate impact of rising oil prices: RMIT experts
-
Proactively managing risk in volatile times