Vietnamese Stock Market Navigates Correction Amidst State-Owned Enterprise Shift
The Vietnamese stock market is currently experiencing a period of correction, marking its first weekly decline in 2026 after five consecutive weeks of gains. This comes despite ongoing support from major players like Vingroup. While the downturn hasn’t triggered widespread panic, analysts are observing a shift in market dynamics, particularly concerning the performance of state-owned enterprises (SOEs).
The Rise and Retreat of State-Owned Enterprises
Recent weeks have seen a notable change in the performance of large-cap SOEs in sectors like oil & gas, banking, and telecommunications (specifically Viettel). These companies, previously driving market gains, are now contributing to the downward pressure. This isn’t necessarily a sign of fundamental weakness, but rather a recalibration after a period of strong growth.
This shift mirrors a broader trend observed in emerging markets where initial rallies fueled by optimism often require consolidation. Investors are becoming more selective, and the easy gains seen earlier in the year are becoming harder to come by. For example, similar corrections were observed in the Indian market in late 2025 following a period of rapid expansion.
Capital Rotation and Emerging Sectors
While SOEs are facing headwinds, there’s evidence of capital slowly rotating towards sectors like real estate, securities, and chemicals. However, this influx of funds remains tentative. According to VNDirect Securities Company, the current capital flow is “exploratory,” lacking the decisiveness needed to establish a new leading sector.
This cautious approach is understandable. The real estate sector, while showing potential, is still navigating regulatory changes and economic uncertainties. The securities sector is heavily reliant on market performance, making it a riskier bet during a correction.
Liquidity and Investor Sentiment
A key indicator to watch is market liquidity. Trading volume on the Ho Chi Minh Stock Exchange (HOSE) decreased by 30.6% last week, with the average daily trading value down 15.5%. This suggests investors are adopting a “wait-and-see” approach, rather than aggressively selling off their holdings. Lower liquidity often precedes a period of consolidation.
AZfin Vietnam’s Chairman, Dang Tran Phuc, believes this correction is a natural response to recent strong gains, and doesn’t necessarily signal a broader bearish trend. The relatively small correction range and reduced liquidity support this view.
Looking Ahead: Promising Sectors for 2026
Despite the current correction, experts remain optimistic about the long-term prospects of the Vietnamese stock market. A key driver of this optimism is the recent Resolution No. 79-NQ/TW from the Politburo, which emphasizes the leading role of state-owned enterprises in the economy.
This resolution has spurred a “smart money” flow into SOEs across various sectors, including finance, banking, oil & gas, rubber, chemicals, and infrastructure. This is a significant departure from previous trends that focused primarily on private commercial banks and residential real estate.
Pro Tip: Focus on companies with strong fundamentals and a clear strategic alignment with the government’s economic policies. SOEs benefiting directly from Resolution 79-NQ/TW are particularly attractive.
Navigating the Current Market Conditions
For investors, the current environment calls for caution and patience. Experts recommend holding existing portfolios and limiting new investments. A strategic approach involves waiting for the VN-Index to retrace to support levels (potentially around 1800-1810 points) before considering further purchases.
Conversely, if the index unexpectedly breaks through resistance levels (1930-1960 points), investors should consider taking profits to preserve gains.
FAQ
- Is this a good time to buy Vietnamese stocks? It depends on your risk tolerance and investment horizon. A cautious approach is recommended, focusing on value and waiting for dips.
- What is driving the shift in investor sentiment? A combination of profit-taking, concerns about SOE performance, and a search for new growth drivers.
- Which sectors are expected to perform well in 2026? SOEs in finance, banking, oil & gas, rubber, chemicals, and infrastructure are highlighted as promising.
- What is Resolution No. 79-NQ/TW? A Politburo resolution emphasizing the leading role of state-owned enterprises in Vietnam’s economic development.
Did you know? Vietnam’s economy is projected to grow by 6.5% in 2026, making it one of the fastest-growing economies in Southeast Asia. Source: World Bank
Further research into individual company performance and macroeconomic indicators is crucial for making informed investment decisions. Stay updated on policy changes and market trends to capitalize on emerging opportunities.
Explore more: Read our latest analysis on Vietnamese economic growth | Learn about investing in emerging markets
Worth a look