2025 to be turning point for Vietnamese stock market

Positive outlook for stock market in 2025

2024 can be considered a successful year for the local stock market (VN-Index) as its return rates outperformed traditional investment channels such as savings. The stock market maintained stable growth, reaffirming its position as a vital medium- and long-term capital channel for the domestic economy.

In the market, funds concentrated on a few growth stocks and sectors with outstanding performances. However, the stock market also faced fierce competition from other investment channels like gold, real estate, and cryptocurrencies, all of which are becoming increasingly attractive.

Despite the fierce competition, Nguyen The Minh, head of Research and Development Division at Yuanta Securities Vietnam (YSVN), paints a positive outlook ahead for the Vietnamese stock market this year. In his opinion, global monetary policies are becoming more aligned, with reduced interest rate differentials among currencies.

In 2025, the US dollar is expected to cool down, whilst US government bond yields will also decline, a factor reducing exchange rate pressures on countries, including Vietnam. This will create opportunities for monetary easing policies in many economies, thereby encouraging capital flows to shift from developed markets to those with lower valuations, like Vietnam.

“Surely a key driver for the stock market in 2025 is the economic recovery. With a GDP growth target of 7-7.5%, or even higher, in 2025, this will provide a solid foundation for the stock market to thrive. Furthermore, the recovery of the real estate market will reduce risks for the stock market. It is forecast that the second half of 2025 will see a resurgence in real estate market liquidity, significantly contributing to Vietnam’s GDP,” explains the analyst.

In addition, the FDI relocation wave and a rebound occurring in export-import activities, especially increases in both order volumes and sales prices in critical industries like seafood and textiles, are expected to gain momentum this year.

“In terms of market valuation, 2025 is anticipated to see corporate earnings growth on the stock market at 18-20%. With the market's P/E ratio below the 5-year average, low valuations combined with high profitability make the stock market a significant growth opportunity,” notes the YSVN representative.

Sharing this perspective, Nguyen Thi My Lien, chief analyst at Phu Hung Securities (PHS), points out that 2025 represents a pivotal year for the Vietnamese stock market. Regulatory authorities have recently demonstrated a strong determination to address market upgrades by amending the Securities Law. The bottleneck of pre-funding requirements for foreign investors has also been resolved through the Ministry of Finance’s Circular 68/2024/TT-BTC, thereby paving the way for a market upgrade.

Despite this, Lien says, to achieve the goal of market upgrading in 2025 and to strongly attract international capital, Vietnam must continue improving transparency, liquidity, and legal infrastructure. These will serve as the crucial foundations for the Vietnamese stock market to attract significant international capital and to solidify its position on the global financial map.

Possible scenarios for stock market in 2025

A strategic report by VNDIRECT Securities recently outlined two scenarios for the VN-Index, reflecting variables that could impact the market this year. In the optimistic scenario, the VN-Index could reach 1,670 points, a 32% increase compared to the previous year. In a less favourable scenario, the VN-Index might cap at 1,340 points, reflecting a modest 6% increase from the end of 2024.

These scenarios were developed based on macroeconomic factors, international policies, and the potential upgrade of the Vietnamese stock market.

In the optimistic scenario, key support factors include the country’s possible upgrade to the emerging market status by FTSE in September, which could attract substantial capital flows from international investment funds. Analysts also forecast listed companies on HOSE to achieve 17% profit growth this year, fueled by the Vietnamese government’s strong commitment to promoting public investment and a GDP growth target of 7.5%, with a possible stretch goal of 8.0%.

Furthermore, the State Bank of Vietnam’s high credit growth target of 16% for this year, along with efforts to upgrade the Vietnamese stock market to ‘secondary emerging market’ status by FTSE, are expected to improve market liquidity and attract both institutional and retail investors, thereby further driving the profitability of financial services.

Stable macroeconomic policies, the government’s continued measures to promote public investment, inflation control, and exchange rate stability will all help to create a conducive environment for business activities.

On the other hand, the pessimistic scenario reflects concerns such as international trade relations, exchange rate volatility and global policy uncertainty. Risks from US-China trade tensions could impact Vietnamese FDI inflows and exports. In addition, the Vietnamese Dong could face depreciation pressures amid a strong US dollar Index (DXY), affecting the competitiveness of export-oriented businesses. Elsewhere, investors await clarity on US policies under the new Trump administration.

Experts believe 2025 will be a transformative year for the Vietnamese stock market. If upgraded, the market could attract US$1.7 billion in passive capital and US$6-7 billion in active capital.

Discussing market prospects, Tran Hoang Son, chief market strategist at VPBank Securities (VPBankS), remarks that historically, during periods of US Federal Reserve interest rate cuts, the S&P 500 has typically risen in the absence of a recession. Currently, the US stock market is reacting strongly to economic developments, with ETF inflows reaching a 10-year high of US$1 trillion. This trend is expected to drive capital flows back to emerging markets like Vietnam.

“The VN-Index is still in a reactive phase, and the market may face a bear trap or fluctuations in early 2025 before entering an upgrade-driven rally toward the end of the year. After a low point in mid-2025, the market is forecast to recover positively in September and October. Investors can plan medium-term strategies and evaluate promising stock portfolios for profit-taking at the end of the growth cycle when the market accelerates again,” predicts Son.