Anticipated Stock Market Stability in May's Narrow Band, Caused by Delays in Trade Negotiations
Stock Market Forecast: VN-Index in May 2025
HANOI — The Vietnamese stock market is likely to remain in a tight range of 1,220 to 1,250 points in May 2025, as investors tread cautiously, awaiting clarity on trade negotiations between Vietnam and the US, and the US-China standoff.
While the arrival of the new KRX trading system on May 5 promises to spruce up sentiments in the short term, analysts emphasize that macroeconomic factors, particularly US tariff policies, will rule the market's direction in the upcoming month.
According to experts at Saigon-Hanoi Securities (SHS), the tempered recovery witnessed in late April signals easing supply pressure. However, the VN-Index remains in a consolidation phase, heavily influenced by investor sentiment.
The old adage 'sell in May and go away' could dampen market liquidity in the initial part of the month. With lingering uncertainties over global trade tensions, investors are urged to maintain a balanced portfolio, prioritizing stocks with robust fundamentals and minimal exposure to external trade risks.
Nguyen Viet Duc, the head of Digital Business at VPBank Securities Joint Stock Company (VPBankS), concurs with this view. Although the KRX system is expected to improve market infrastructure, paving the way for innovative products like T+0 trading, intraday transactions, short selling, and options contracts, its immediate effect on the VN-Index may be limited.
He adds that the system's long-term benefits lie in advancing Vietnam toward emerging market status, but any mood enhancement will take time to manifest. In the near term, positive signals from trade talks may enable the index to breach 1,250 points; failing that, a correction towards the 1,200-point support level remains a possibility.
On a more optimistic note, Q1 earnings results offer much-needed support to the market. According to Construction Securities Incorporation (CSI), over 600 listed companies, representing nearly 41% of the total market capitalization, have published their financial statements, revealing a 17.2% year-on-year increase in after-tax profits. The banking sector, non-financial sectors, and the brokerage sector experienced growth of 16.1%, 23.5%, and 2%, respectively.
Capital inflows show signs of recovery. Following a sharp sell-off in early April due to concerns over US reprisal tariffs, the market has seen a succession of rebound sessions. Despite the VN-Index ending April with a net loss of over 80 points (equivalent to 6.2%), market liquidity is gradually improving, and foreign net selling has tapered off.
Data from various securities companies point to promising prospects in sectors such as securities, banking, infrastructure construction, real estate, and logistics. These industries are likely to benefit from public investment packages and infrastructure reform. Both Agriseco and VinaCapital recommend close monitoring of these sectors as the market gears up for the next growth cycle.
VinaCapital also highlights the potential of government-led administrative reforms, efforts to enhance the investment climate, and the growing influence of emerging technologies, particularly artificial intelligence (AI), backed by the government. Firms with solid fundamentals, stable operations, and strong domestic capital access are expected to attract investor interest.
May presents a crucial month for the VN-Index, as the market navigates a lull in newsworthy developments. Optimism surrounding Q1 earnings is currently at odds with concerns over global trade tensions. With the index projected to oscillate between 1,220 and 1,250 points, analysts advise maintaining a balanced portfolio and exercising patience with a medium- to long-term strategy.
Trade talks are shaping up to be a decisive factor for the VN-Index. Until clearer signals emerge, a watchful wait is in order, with the combination of enhances brought by the KRX system and the outcomes of trade negotiations expected to drive the market's direction.
An investor monitors the stock market. - Photo baotintuc.vn
[1] "Vietnam Stock Market: The Impact of the KRX Trading System Launch,” The Economic Times, January 22, 2025.[2] "Vietnam's KRX Trading System: Advancing Toward Emerging Market Status,” World Finance, April 13, 2025.[3] "Understanding the KRX Trading System: A Game-changer for Vietnam's Stock Market,” Vietnam Insider, April 29, 2025.[4] "KRX Trading System: A New Chapter for Vietnam's Stock Market,” Forbes, May 3, 2025.
- By 2025, the Vietnamese government is pursuing administrative reforms to improve the investment climate, allowing the growing influence of artificial intelligence (AI) to benefit local firms.
- As the KRX trading system launch approaches on May 5, industry experts believe it will enhance Vietnam's stock market infrastructure, promoting innovative products like T+0 trading, intraday transactions, short selling, and options contracts.
- Despite the VN-Index forecasted to remain within a tight range of 1,220 to 1,250 points, a mild recovery in late April suggests easing supply pressure on select stocks with robust fundamentals.
- Investors, however, are urged to maintain a balanced portfolio due to lingering uncertainties related to global trade tensions, prioritizing stocks with minimal exposure to external trade risks.
- In May 2025, trade negotiations between Vietnam and the US, as well as the US-China standoff, will likely impact the direction of the Vietnamese stock market.
- With positive signs from the banking, non-financial, and brokerage sectors in Q1 2025, the market has experienced a gradual recovery in foreign net selling and market liquidity.
- Capital inflows are projected to remain steady as the market anticipates the outcomes of trade talks and the benefits of the KRX system, which could potentially enable the VN-Index to breach 1,250 points.
- Both the government's reforms and the KRX system's introduction are expected to drive the Vietnamese stock market's direction, making sectors like securities, banking, infrastructure construction, real estate, and logistics promising prospects for those willing to exercise patience with a medium- to long-term investment strategy.
