The year 2024 has been marked by significant global economic and political turbulence. Domestically, Vietnam’s economy demonstrated resilience, achieving remarkable growth and attracting substantial foreign investment.

From high-speed rail projects to nuclear power advancements, Vietnam has laid a robust foundation for entering a new era of economic prosperity. With the stock market's growing significance, 2025 is shaping up to be a critical year for both domestic and international investors.

Overcoming foreign pressure

In 2024, Vietnam's stock market (VN-Index) maintained a resilient 12% growth despite facing considerable foreign investor sell-offs, totaling nearly $4 billion.

Currency pressures, with the USD losing 4.4% against the VND, dampened the appeal of Vietnamese stocks. The VN-Index struggled to surpass 1,300 points, spending most of the year around the 1,200-point mark-a milestone dating back to 2006.

Although trading activity was subdued, the market achieved a total capitalization of approximately $278 billion, equivalent to over 69% of GDP. Personal trading accounts surged by 25%, reaching 9.15 million-roughly 9% of the population.

Policy reforms in 2024 were a standout feature, aimed at addressing longstanding market obstacles. Notably, updates to Vietnam’s Securities Law improved transparency and cracked down on fraudulent activities. New regulations, such as allowing foreign investors to purchase shares without pre-funding, signaled progress towards an anticipated market upgrade.

As the year closed, optimism returned, fueled by the U.S. Federal Reserve's cautious approach to interest rate cuts and reduced global financial uncertainty. Experts like Dinh Quang Hinh, from VNDirect, projected the VN-Index could stabilize around 1,270 points after holding key support levels.

A transformative year ahead

Michael Kokalari, chief economist at VinaCapital, predicts 2025 will be pivotal for Vietnam’s stock market. Foreign capital inflows are expected to rebound, buoyed by clear indications that U.S. President Donald Trump’s trade policies will not target Vietnam.

Profit growth for listed companies is forecasted to rise from 13% in 2024 to 17% in 2025, attracting renewed investor interest.

However, Vietnam's significant trade surplus with the U.S., the third largest globally, remains a concern. Proactive measures to address this imbalance could prevent potential scrutiny from U.S. policymakers.

Challenges include a proposed U.S. law to revoke China’s permanent normal trade relations (PNTR) status, which could exacerbate U.S.-China trade tensions and disrupt Asian markets. Additionally, Vietnam's export and GDP growth may slow, impacting the value of the VND and triggering stock market volatility in the first half of 2025.

The second half of 2025 offers brighter prospects, with expectations of government-backed economic initiatives, including public investments and infrastructure development. These measures, along with a stabilizing USD-VND exchange rate, are likely to support GDP growth and revive the real estate and consumer sectors.

Valuations remain attractive, with Vietnam’s projected P/E ratio of 12 significantly lower than regional peers. This, combined with anticipated market reclassification from “frontier” to “emerging” status by 2026, has bolstered confidence among analysts.

MBS Securities forecasts the VN-Index reaching 1,420 points by 2025. Many sectors boast valuations below their three-year averages, with listed companies’ profits expected to grow by 18-19% during 2025-2026.

The optimistic macroeconomic outlook, with GDP growth projected at 7-7.5% and robust FDI inflows, underpins these bullish forecasts.

Manh Ha