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Research Insights

Strategy Reports

Viewfinder 2Q2026: Resilience amidst chaos

Viewfinder 2Q2026: Resilience amidst chaos

Our long-term view remains that Vietnam is in the middle of a unique growth cycle and that despite global turmoil is well positioned to outperform all of its peers. This remains a national story of resilience that is unmatched. On the shorter-term horizon, we forecast a 1-year index target of 2055 (12.5% upside) from a bottom up perspective from a more balanced portfolio. Our 2026 GDP growth target remains 7.6% (8% for 2027) despite global uncertainties. We see value across the index which trades at an undemanding 10.4x forward PE when VIC is excluded. Some high-quality names are offering longer term investors excellent entry points (FPT being the most obvious). By sector, we favor banks, consumer, and brokers at these levels.

Viewfinder 2026: Vietnam in self-drive mode

Viewfinder 2026: Vietnam in self-drive mode

Our last strategy book (‘Flexing the bamboo’) was released at a time of extreme uncertainty with US tariffs dominating dialogue. Just six months later and you will struggle to see many tariff references in this report or hear mention of them in the market. Vietnam has pivoted quickly to a domestic agenda with emphasis on the private sector, legislative change, infrastructure building, and administrative and Governmental overhaul. We forecast this will provide 7.6% GDP growth next year. There are a host of upcoming catalysts which give us confidence that the 2025 bull market will continue. We have a base case Index target of 1,958 in 2026 but see the potential for this to overshoot.

Macro & Market Insights

FTSE Russell raises VN weight, boosting inflows

FTSE Russell raises VN weight, boosting inflows

FTSE Russell raised Vietnam’s weighting across all four relevant indices, while the list of Vietnamese constituents remained unchanged from the August 21 announcement. Based on the updated weightings, we raise our base-case estimate for total passive inflows to USD1.509bn, implying USD150.9mn in the first 10% tranche and USD301.9mn, USD528mn, and USD528mn in the subsequent tranches. VIC, VHM, HPG, VCB, and MSN are expected to capture the largest inflows, accounting for 62.2% of total estimated inflows, with VIC alone contributing 40.5%; the first tranche will be effective on September 21, 2026.

Inflation control on a tightrope

Inflation control on a tightrope

CPI rebounded 0.47% m/m in Aug-26, ending a 2-month disinflation streak, pushing y/y growth to 4.89%, above HSC’s 4.41% forecast. Transport was the key driver with a 4.09% m/m growth, adding 0.41ppts to the headline. Average CPI reached 4.45% y/y in 8M26, close to the Government’s 4.5% target. Although Brent averaged USD91.4/bbl as of 9 September, below our FY26F assumption of USD95/bbl, spot prices briefly exceeded USD100/bbl in early September. A prolonged period of elevated oil prices would therefore increase upside risks to our 4.7% FY26F CPI forecast. Global central banks are facing a more difficult policy trade-off as higher energy prices revive inflation pressures. The ECB has already raised rates by 25bps inp Sep, while market pricing for a 25bps Fed rate hike has strengthened materially.

Sector Insights

T&G: Outlook clouded by tariff uncertainties

T&G: Outlook clouded by tariff uncertainties

Vietnam's T&G exports rose a modest 1.8% y/y in 7M26, reflecting a stillchallenging demand environment, but remained broadly in line with our FY26F of 2.5% export growth. The sector outlook looks clouded by US tariff uncertainties and intensifying scrutiny of Vietnam's trade practices. The bigger risk lies beyond the current 12.5% so-called forced-labor tariff – namely, US investigations into overcapacity and intellectual property (IP) – while preliminary moves re. transshipment also concern. We cut our FY26-28 earnings forecasts for TCM (impacted by margin contraction in 2Q26) but only tweak those for TNG. Following this, we reiterate our Add on TNG with 17% upside to our new TP and downgrade TCM to Reduce (from Hold).

Real Estate Development: Proposed terms of housing ownership

Real Estate Development: Proposed terms of housing ownership

The Ministry of Construction has recently submitted the draft for the amended Housing Law, which if passed in the next discussion might become effective in March 2027. A key proposal introduces fixed-term ownership of apartments. The draft's central change is introducing fixed-term apartment ownership (Section 4, Articles 28-29), explicitly stating that ownership terminates when a building's service life ends or when it must be demolished. However, it remains unclear whether the provision would apply to existing projects or only to new ones. In the market, this proposal has created a negative sentiment toward the sector, leading to weak performance. Many good developers are trading near book value, providing an attractive upside. Developers focusing on real demand should be less impacted in our view.

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