VN-Index rebounds strongly: Are investment opportunities still available?

The VN-Index has seen a strong recovery, but capital flow remains dispersed, and there are still plenty of investment opportunities in sectors that have yet to bounce back, such as seafood, textiles, and securities.

Since the U.S. tariff-related news in early April, the market has rebounded sharply, with the VN-Index climbing from 1,160 to over 1,300 points.

Given this rally, many experts are advising investors to proceed with caution in the near term, as a significant correction could occur before any further upward movement.

On Monday, the market opened cautiously. In the derivatives market, the VN30F2506 briefly hit the floor at 1,308.1 points before rebounding. Similarly, the VN-Index in the spot market dropped as much as 25 points at one point, falling below the 1,300 mark.

However, by the end of the session, the VN-Index gained 18 points to close at 1,332, with liquidity exceeding VND23 trillion ($887.6 million). Gains were broad-based, with 253 stocks rising and only 72 declining. The HNX-Index rose 3 points to 219.41, while the UPCoM-Index added 1.12 points to reach 97.34.

In the derivatives market, futures contracts VN30F2506, VN30F2509, and VN30F2512 all closed in the green, posting gains of 9.2 to 11.8 points.

These sharp fluctuations have left many investors feeling uncertain. Speaking with The Investor, Nguyen The Minh, director of research and development for individual clients at Yuanta Securities Vietnam, noted that the market has been flashing risk warning signals in recent weeks.

He advised investors not to make hasty moves or panic-sell, as seen in the Monday session. While the current uptrend remains intact, the risks haven’t disappeared. He recommends using this recovery as an opportunity to lock in some profits rather than aggressively buying or selling.

Which sectors offer investment opportunities

On the Monday episode of Café cùng chứng (Coffee with stocks), Pham Luu Hung, chief economist at SSI Securities Corporation, said the VN-Index has rebounded significantly and is nearing pre-tariff announcement levels.

He pointed out that large-cap stocks in the Vingroup group such as VIC, VHM and VPL were major contributors to this recovery. Without their performance, the VN-Index might have dipped further.

Nevertheless, the SSI analyst believes that Vietnamese stock valuations remain below their five-year averages. As a result, current market conditions still offer reasonable investment opportunities.

“While caution is advised after such gains, it's clear that the VN-Index remains at relatively low levels, and there's still room for investment,” added Hung.

In terms of sector outlook, Hung said the real estate sector was the top performer last week, although its momentum is fading. In contrast, banking stocks continue to attract capital and are suitable for medium- to long-term investors. Fertilizer stocks also warrant attention due to their attractive valuations.

The current most significant event is the ongoing working session of Vietnam’s National Assembly, the country's legislative body (held in two phases May 5-29 and June 11-30). Hung said he expects many legal documents approved or discussed to have implications for various sectors.

Other key influences include developments in the U.S. market, such as Nvidia’s earnings, the April U.S. PCE index, and the upcoming Federal Reserve policy meeting. Additionally, the MSCI May portfolio rebalancing on Friday, May 30, and the release of Vietnam's domestic macroeconomic data for May could also impact investor sentiment.

Hung also warned about potential tariff risks. He referenced President Donald Trump’s remark about possibly announcing new tariffs within two to three weeks, without negotiating with all affected countries, as there is not enough time.

Such an announcement could come this week, he said, urging investors to brace for unexpected developments. Accordingly, Hung suggests maintaining a stock allocation of 70-80% and reducing short-term holdings to below 50% if the VN-Index falls below the critical support range of 1,260-1,270.

Nguyen The Minh added that capital flow is currently fragmented across sectors. While real estate stocks have surged, many others have underperformed due to tariff concerns - such as seafood, textiles, and industrial park real estate. Securities stocks and many stocks of the banking sector have also yet to see significant recovery.

“There are still plenty of opportunities - it all depends on which scenario the market follows,” said Minh.

“There is still a risk that the VN-Index could break below the 1,300-1,330 range. To manage this, it’s best to maintain a moderate stock allocation - around 60%.

“I expect the index to fluctuate within this range, so it’s not the time to increase exposure. If the VN-Index breaks below this range, reduce holdings. If it breaks above, then consider adding. The focus should be on sectors that haven’t yet seen a significant rebound,” Minh concluded.