Vietnam’s benchmark VN-Index likely to reach 1,500 points on new US tariff: broker

The VN-Index, representing the Ho Chi Minh Stock Exchange (HoSE), may reach 1,500 points in the coming time as the tariff agreement reached with the U.S. is expected to boost investor sentiment, according to Maybank Securities Vietnam (MSVN).

In its updated report on the recent U.S.-Vietnam tariff agreement, MSVN says the key terms include a 20% tariff on Vietnamese exports to the U.S. and a 40% tariff on transshipped goods. Meanwhile, U.S. exports to Vietnam will enjoy zero tariff.

The broker considers this a relatively favorable result for Vietnam, especially in the current context and given the transitional period provided.

Regarding domestic companies, MSVN notes that the 2025 AGM season indicated that while the 20% tariff is significant, it remains manageable for most Vietnamese exporters. This tariff rate is unlikely to cause major disruptions to business operations in the U.S. market.

It believes businesses now have time to negotiate cost-sharing mechanisms with U.S. importers, adjust pricing structures, and optimize operations to maintain competitiveness. Many companies are also actively diversifying markets to reduce dependence on the U.S.

In terms of foreign direct investment (FDI) attraction, the current tax differential between Vietnam and key competitors has narrowed to just 5-10% (previously 10-35%), while the tax gap with China has temporarily widened to 35% from 15%, similar to the “decoupling” and trade war period under Trump 1.0.

Together with Vietnam’s structural advantages, including a well-established manufacturing base; 17 free trade agreements (FTAs) with major markets; competitive labor costs and a skilled workforce; and a large domestic market of 100 million people, MSVN believes Vietnam will not only retain current FDI inflows but will also continue to be an attractive destination for new investment, even if it does not achieve the same level of “trade windfall” as during Trump 1.0.

The broker views this as a successful negotiation outcome. Like businesses, the country benefits from reduced transitional risks and has time to restructure its growth model toward higher quality, diversification, and sustainability aligned with the objectives of the Politburo’s Resolution 57 on technology and innovation, Resolution 59 on global integration, and Resolution 68 on private sector development.

For the stock market, MSVN believes that the agreement has removed a major uncertainty for both investors and businesses. Market sentiment is expected to improve as more details are provided.

The stock of garment and footwear giant Nike (NKE) rose 4% over Wednesday night, reflecting confidence in its supply chain in Vietnam (50% of its footwear and 30% of its apparel output is manufactured in Vietnam).

According to MSVN’s forecast, Vietnamese businesses’ FY2025 profit growth is expected to reach 15.1% year-on-year, supported by a resilient export sector and strong domestic demand.

The broker targets the VN-Index at 1,500 points, corresponding to a 12.5x P/E ratio, close to the five-year average minus one standard deviation.

Priority is still given to dividend-paying stocks and investment themes supported by structural demand such as IT and air logistics, and government stimulus packages like real estate, consumer goods, and steel, it noted.

The VN-Index closed Thursday at 1,381.96 points, slightly down 0.19% from the previous session.

Party chief To Lam and President Donald Trump on Wednesday stated that they welcome the agreement reached by the negotiating teams on the Joint Vietnam-United States Statement on a Fair, Balanced, and Reciprocal Trade Agreement Framework.

Lam and Trump held a telephone conversation at 8 p.m (Vietnam time) on the same day to discuss bilateral relations and negotiations on reciprocal tariffs.

On Truth Social, President Trump wrote that Vietnam will pay a 20% tariff on any and all goods sent into the United States, and a 40% tariff on any transshipping.

This is down significantly from the 46% in the original reciprocal tariff plan announced on April 2, 2025.

In return, U.S. products into Vietnam will enjoy zero tariff.