Geopolitical tensions in the Middle East continue and are difficult to predict, high oil prices, above 100 USD/barrel, put pressure on inflation and economic growth. This makes investor sentiment also less positive when the market does not have many good opportunities in the short term, as well as it is not possible to measure the level of impact on the global economy, on Vietnam's economic growth, as well as businesses.
In Vietnam, inflation is still under control thanks to reasonable management policies, but this is still a noteworthy risk. Combined with exchange rate pressure, Vietnam's monetary policy has very little room to further ease.
In addition, the difference between capital mobilization growth and lending at banks is putting pressure on the interbank market. Interest rates for terms continue to be maintained at a high level, with interbank interest rates for terms of 1-3 months exceeding 7%/year, although overnight interest rates have decreased to around 4%/year from the peak of 16%/year before the Lunar New Year.
High deposit interest rates increase capital costs, while also increasing opportunity costs when participating in the stock market. As a result, cash flow tends to avoid high-risk assets such as stocks, switching to safer channels such as government bonds or bank savings.
Internal pressure on the Vietnamese stock market also comes from the fact that foreign investors continue to maintain net selling status, creating great pressure on the market. Last week, foreign investors net sold VND 5,865 billion on all three stock exchanges - a record level since the beginning of 2026.
Since the beginning of the year, the total net selling value of foreign investors has reached more than 18, 258 billion VND, mainly due to concerns about geopolitical risks and the strengthening of the USD. This makes it difficult for VN-Index to maintain its upward momentum in the short term, with recent trading sessions witnessing reduced liquidity.
Regarding valuation, VN-Index is trading at a projected P/E level for 2026 of about over 11 times. Compared to the Asian region, Vietnam's P/E is at an average low level if excluding developed markets such as Korea, Japan and Taiwan (China). This shows that, despite the discount compared to the previous peak, the market is still not attractive enough to attract large cash flow in the short term.
Although the market is facing many short-term challenges, experts still highly appreciate the possibility that VN-Index will return to a long-term upward trend, which is still high after absorbing all the impact from the conflict in the Middle East region. The reversal point may occur when the US announces a successful campaign, or when the Strait of Hormuz is unblocked, reducing global concerns.
In addition, good news supports FTSE Russell's market upgrade review expected to take place in early April 2026, officially effective from September 2026. Being upgraded to emerging markets may help the Vietnamese stock market attract an additional 5-10 billion USD of foreign capital, promote liquidity and market valuation.
However, experts also warn that recovery waves after a strong "downturn" could completely become price traps if external risk factors, especially geopolitical tensions, continue to put pressure on market sentiment.
Experts put forward the view that instead of trying to predict whether a few recovery sessions are "bull traps" or not, it is not a key factor. Investors should focus on assessing the variables that are strongly affecting the market, the short and medium-term trends of VN-Index as well as the spread of cash flow between industry groups.
At the present time, investors need to allocate a reasonable proportion, avoid using leverage, and prioritize allocating cash at least 30-40% of NAV to maximize adjustments to accumulate good stocks. Long-term investors need to wait for good fundamental stock groups to adjust to more attractive valuations.
