Vietnam’s benchmark VN-Index expected to experience healthy corrections for further gains

Corrections are necessary for the VN-Index, which represents the Ho Chi Minh Stock Exchange, to reach higher points in the future, according to experts.

At the close of Thursday’s trading session, the VN-Index dropped by 8.14 points, or 0.61%, to 1,326.27, marking its first decline after five consecutive gains since March 6.

The red dominated the HoSE with 366 tickers falling and 121 increasing. One notable highlight was VIC, the ticker of Vietnam's largest private conglomerate Vingroup, which hit its ceiling price of VND51,400 (about $2) per share, with no sellers available.

On Friday, the VN-Index continued to edge down, losing 0.12 points, or 0.01%, to 1,326.15.

According to Nguyen The Minh, head of research and development at Yuanta Securities Vietnam, cash flow appeared to be weakening after a strong rally.

“The positive factors that investors were hopeful about, such as macroeconomic prospects and the government’s plan to boost public investment, have already been reflected in the VN-Index’s rise above 1,300 points. The cash flow in the coming sessions will likely take a pause as investors reassess risks, particularly from the ongoing trade war,” he said.

However, Minh also pointed out that the VN-Index's correction is happening amid global and regional stock market declines. For instance, the U.S. Dow Jones index has dropped about 8% from its peak.

VN-Index poised to reach higher levels

Many experts, securities firms, and investors believed corrections will set the stage for the index to achieve higher levels.

An experienced investor observed that most stocks on Thursday were affected by profit-taking, aligning with the market’s overall decline, which resulted in most investor accounts showing losses.

“However, with the current liquidity, I believe that after absorbing the profit-taking, the VN-Index will resume its upward trend,” the investor shared.

Similarly, Aseansc Securities saw the Thursday decline as a necessary adjustment after the strong rallies since mid-January. The firm forecast that the domestic market will experience some fluctuations in the near future.

From his perspective, Minh believed that the VN-Index has the potential to surpass the 1,500-point mark following the correction phase.

“Cash flow in 2025 is expected to increase in the stock market, as savings have low interest rates while gold and Bitcoin already had a strong year in 2024 and have little room for further growth.

Furthermore, the market is currently undervalued and supported by many positive factors. I expect the VN-Index to hold above 1,300 points and then approach 1,500 points once again,” Minh said.

He further highlighted several factors supporting the VN-Index’s future performance, including the potential upgrade of Vietnam’s market status, IPOs, and listings of major companies such as Vinpearl (Vingroup’s hospitality arm) and Techcombank Securities (TCBS), the moving of stocks from the Unlisted Public Companies Market (UPCoM) to the HoSE, the equitization of state-owned enterprises like Becamex IDC (BCM) and Central Hydropower JSC (CHP), and the government’s combined monetary and fiscal policies aimed at ensuring sustainable recovery and growth for the domestic economy.

Minh said he also expected cash flow in the stock market to become more evenly distributed across various sectors. Therefore, he recommended that investors focus on stocks with strong potential in industries such as transportation, banking, securities, food production, technology, chemicals, electricity, real estate, and construction.

Earlier, strategic reports from several securities firms projected that the VN-Index would experience significant acceleration in 2025. HSC Securities forecast that the major index could reach 1,468 points, presenting a 19.5% growth in market-wide profits.

Vietcap believed that the index could target 1,500 points, thanks to expansionary fiscal policy, while MBBank Securities (MBS) predicted the index will range between 1,400 and 1,420 points. TPBank Securities (TPS) expected the VN-Index to hover around 1,470 points.

MBS, in particular, projected that with an 18% profit growth for listed companies and a P/E ratio of 12.5-13x, the VN-Index could reach 1,400-1,420 points in 2025. The domestic stock market is expected to benefit from factors such as projected profit growth of 18% in 2025 and 19% in 2026 for listed companies.

Additionally, the U.S. Federal Reserve’s monetary easing cycle is anticipated to boost foreign investment flows into emerging markets, including Vietnam.