Vietnam Stocks Near Record Highs as Reforms and Trade Clarity Lift Market Confidence
Vietnam’s stock market is approaching record territory, driven by investor optimism over major political reforms and clearer trade terms with the United States.
The government, under Prime Minister Pham Minh Chinh, is executing its most extensive administrative overhaul in decades, aiming to reduce bureaucratic inefficiencies and redirect spending toward development. These changes, coupled with a new trade agreement that reduced U.S. tariffs on Vietnamese exports from 46% to 20%, have energized the market.
So far in 2025, the VN-Index has surged 19%, outpacing other Southeast Asian markets. Analysts believe more upside is possible if Vietnam is upgraded to emerging-market status by FTSE Russell—an upgrade that could attract up to US$6 billion in foreign capital, potentially as early as September.
“Never before have we seen such strong reforms in Vietnam,” said Tyler Manh Dung Nguyen, Chief Market Strategist at Ho Chi Minh City Securities. “I would increase exposure to Vietnam early in this transition.”
Vietnam’s pro-growth agenda aims for 8% GDP growth in 2025 and high-income status by 2045. In the first half of the year, the economy grew 7.52%, bolstered by a manufacturing boom as global buyers sought to avoid tariff hikes on U.S.-bound goods.
Foreign investor confidence is returning. In July alone, overseas funds net purchased US$411 million worth of Vietnamese equities—marking the second month of inflows in 2025. Meanwhile, regional peers like Malaysia, Indonesia, and the Philippines saw net outflows.
Major index performers this year include:
- Vingroup JSC (conglomerate)
- Vietnam Joint Stock Commercial Bank for Industry and Trade
- Hoa Phat Group JSC (steel producer)
Investors are drawn to the market’s 15% projected earnings growth and 2026 P/E ratios around 10x, making valuations look attractive. Christopher Leow, CEO of Principal Asset Management Singapore, said, “We became more optimistic in May when these valuation metrics aligned with growth forecasts.”
However, risks remain. A global slowdown in the second half of the year could dampen momentum. Uncertainty also lingers over potential 40% U.S. tariffs on re-exported goods, which could impact Vietnam’s logistics-heavy sectors.
Still, long-term sentiment remains bullish. “It’s hard to imagine Vietnam not evolving into a significantly larger economy,” said Johannes Loefstrand, a portfolio manager at T. Rowe Price, which has its largest frontier market allocation in Vietnam. “Return on capital here is far higher than in many other markets.”
