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MID-YEAR INVESTMENT STRATEGY 2025: THE UNIQUE PATH

We forecast that the VN-Index may reach the range of 1,513 to 1,756 over the next 6 to 8 months, equivalent to a 6%–23% increase compared to the closing level on July 9, 2025.
We believe the direct impact of tariffs on Vietnam's economic growth in 2025 will not be significant. The EPS growth of the VN-Index in 2025 is expected to reach around 114–120 VND, representing a 15%–22% increase YoY. Using a "top-down" approach, based on GDP growth, credit, and profit margins, we estimate the EPS at 113.8 VND (+15.3% YoY). Meanwhile, data from Viet Dragon's stock analysis list shows an EPS growth of around 16.5% YoY. With a "bottom-up" approach, aggregating from individual companies, the overall market EPS growth could reach 21.6% YoY.
We have revised our target P/E range for the VN-Index in the next 6–8 months to 13.3x–14.7x (compared to 13.5x–14.5x previously) to reflect positive supporting factors such as loose fiscal and monetary policies maintaining low interest rates, and expectations of a market upgrade in FTSE's September 2025 review. The FTSE Russell evaluation in March 2025 indicates that Vietnam's upgrade to emerging market status is imminent. FTSE emphasized the need for improvements in trading mechanisms and more transparent and convenient foreign investor account openings. To meet these requirements, the government has issued additional circulars such as Circular 18 and 03 in 2025 (following Circular 68/2024), and the KRX system will officially operate from May 2025. Once the upgrade is realized, Vietnam’s market will attract significant capital flows from global benchmark funds, around USD 1 billion, which will improve liquidity and valuations.
However, investors should still monitor risks such as geopolitical volatility, exchange rate pressures if the Fed delays rate cuts, and uncertainties in Trump administration policies. Nevertheless, we believe these risks are largely peripheral and may only affect market sentiment in the short term, without impacting the underlying fundamentals of businesses unless they become structural.
The emerging multipolar trend is increasing global economic and political instability, with risks such as changes in tariff policies and unexpected geopolitical developments continuing to affect Vietnam's growth and market sentiment. To assess the impact, it is essential to determine whether the risks have a direct short-term effect on businesses or are structural in nature. The impact primarily spreads through two channels: (1) the financial channel and (2) the commodity channel.
If the Fed continues to delay rate cuts, domestic monetary policy management will come under increased pressure, especially as Vietnam is loosening policies to support growth, while foreign exchange reserves remain limited.
While Vietnam's tariff environment is currently favorable compared to many countries, there are still risks due to the U.S. not making official decisions on certain sectors and the potential adverse interpretation of the "transshipment" concept, which could affect long-term production and export plans. The market is also reacting sensitively, even excessively, to statements from Trump or major geopolitical events.