By the end of 2025, the VN-Index had risen by 40.87 per cent year-to-date. However, the rally was largely driven by stocks within the Vingroup ecosystem, with limited breadth across the broader market.

The VN-Index ended the year trading at a price-to-earnings (P/E) ratio of around 17.3x. Excluding the impact of Vingroup stocks, the VN-Index valuation declines to 14.6x, which is an attractive valuation range for medium- to long-term investment.

Tariff negotiations, persistent inflation, and central bank interest-rate policies became the main focal points for global equity markets. Gold emerged as the best-performing asset (approximately 60 per cent), driven by concerns over geopolitical risks and rising sovereign debt levels.

Countries have increasingly turned to expansionary fiscal measures as an alternative policy tool, given the limited remaining room for central banks to cut interest rates in 2026. The global growth outlook for 2026 points to a slight deceleration in GDP growth to 2.9 per cent from 3 per cent in 2025.

However, the key downside risk lies in weakening consumer confidence across most economies, which has continued to decline since mid-2025. At the same time, financial system liquidity is beginning to show signs of tightening, while geopolitical risks are on the rise.

Against this backdrop, the Vietnamese government remains steadfast in its commitment to high growth. Despite mounting challenges following the tariff shock and severe flooding and natural disasters in Q4 2025, Vietnam reported GDP growth of 8.02 per cent in 2025. The GDP growth target for the 2026–2030 period is set at 10 per cent.

Growth momentum is expected to be driven by domestic fundamentals – through institutional, legal, and administrative reforms, alongside a stronger role for the private sector –while continuing to leverage traditional strengths such as exports and foreign investment.

Last year was a pivotal one for Vietnam’s equity market, highlighted by its provisional upgrade to FTSE secondary emerging market status. With the upgrade not due until after September, foreign investors continued to post net selling in Vietnam’s equity market during 2025, amounting to VND124 trillion (approximately $4.8 billion).

This trend was broadly consistent across Southeast Asian equity markets in 2025. Nevertheless, this trend is expected to reverse in 2026, supported by the market upgrade event and a positive VND–USD interest rate differential.

ACBS forecasts that net profit after tax of companies under its coverage will grow by 14 per cent on-year in 2026 (vs 21.1 per cent in 2025). Under the base-case scenario, ACBS decomposes the VN-Index into two components. The VN-Index excluding Vingroup stocks is expected to continue trading in line with its five-year median P/E, while the rally in VIC-related stocks is unlikely to be sustained in 2026. This scenario implies a VN-Index level of approximately 2,040 points this year.

ACBS' 2026 strategic portfolio prioritises sector leaders in banking, retail, residential real estate, and public investment, as these stocks simultaneously meet several criteria: sustainable core business growth in 2026; direct beneficiaries of the market upgrade event; attractive valuations with potential for re-rating driven by subsidiary initial public offerings in 2026; and continued upside over the next five-year cycle supported by accelerated public investment.