VN-Index aims for 1,800 points, expecting foreign capital inflow

In July, the net withdrawal value of ETF funds was recorded at the lowest level of the year, in which domestic funds (+709.7 billion VND) had net capital inflow, balancing the pressure of capital withdrawal from foreign funds (-753.6 billion VND).

In terms of capital flow structure, last month, the most prominent among domestic funds was DCVFMVN Diamond with a net inflow of VND 1,200 billion, contributing mainly to the net inflow of domestic funds in the month. This is the highest net inflow since the end of December 2022. Meanwhile, the group of funds simulating the VN30 index was under pressure to withdraw capital, of which the most was DCVFMVN30 fund (-VND 369 billion), the 9th consecutive month under pressure to withdraw capital. In addition, KIM Growth VN30 (-VND 71.6 billion), SSIAM VN30 and MAFM VN30 suffered slight capital withdrawals.

Foreign investors returned to strong net buying in the Vietnamese stock market in July. The net buying value was VND8,500 billion, in contrast to the net selling value of VND1,900 billion in June, helping to narrow the total net selling value since the beginning of the year to VND37,500 billion. Foreign investors focused on net buying in the securities, banking, and real estate groups with prominent codes such as SSI, VPB,SHB , HDB, VND...

In the context of selectively diversifying cash flow as above, the analysis team from SSI assessed that individual investors are still cautious. However, looking at the upcoming prospects, the Vietnamese market is still attractive in the medium and long term thanks to stable macro and recovering growth, SSI said.

Currently, the VN-Index is still trading at a forward P/E of ~12.6x, lower than the regional average and below the 5-year average, showing that the market valuation is still attractive. At the same time, Vietnam is still the most potential candidate in the Southeast Asia region for upgrading from a frontier market to an emerging market (MSCI, FTSE). The amendment of the Securities Law, Investment Law and improvement of foreign room are being vigorously promoted to serve the upgrading.

Along with favorable macroeconomic conditions, the second quarter 2025 business results season exceeding expectations was also one of the prominent catalysts helping the stock market perform optimistically last July.

Specifically, total revenue in Q2/2025 recorded a modest growth of 6.9% over the same period, however, the growth in after-tax profit attributable to parent company shareholders increased sharply by 31.5%, far exceeding the 20.9% increase in Q1/2025. Most industry groups recorded positive profit growth, except for the industrial group. Industry groups with results exceeding our expectations include retail, fertilizer, utilities, banking and industrial parks. In contrast, some industries such as food & beverage (F&B) and some residential real estate stocks recorded results lower than expected.

A solid recovery in earnings growth will continue to be the main driver behind the market. This trend is supported by many factors, such as the recovery momentum of the real estate market and public investment, a favorable interest rate environment, gradually easing concerns about tariff risks, and especially expectations of market upgrade in October.

SSI maintains its forecast for 2025 parent company's after-tax profit growth for the whole market at 13.8%, equivalent to 15.5% growth year-on-year in the second half of the year, although there may be slight adjustments after the financial reporting season ends.

“In the next period, although the market may face short-term fluctuations due to increased profit-taking pressure after the high margin period at the end of July, we expect the VN-Index to move towards the 1,750 - 1,800 point range in 2026,” SSI forecast.

SSI continues to believe that Vietnam will be upgraded to an emerging market by FTSE Russell in October 2025. This event could help attract capital flows of about 1 billion USD from index ETFs.

Observations from other markets show that the market often has positive developments in the period before being upgraded, thanks to expectations of increased foreign capital flows and a marked improvement in investor sentiment. This will be one of the important supporting factors for the Vietnamese market in the second half of 2025.

Source: https://baodautu.vn/vn-index-huong-toi-moc-1800-diem-ky-vong-vao-dong-von-ngoai-do-vao-d354523.html