What can investors expect from the “era of growth”?

Mr. Nguyen Duy Anh, CFA, Portfolio Management Director, Vietcombank Fund Management Company (VCBF)

Unexpected growth and cash flow shifts

The growth of the VN-Index in the first months of 2025 is considered a big surprise. Back at the beginning of the year, most securities companies predicted that the market would start slowly, with the expectation that it would only become more active in the second half of the year. However, the reality was the opposite. The business results of listed companies far exceeded expectations, creating the main driving force for the index's growth. Mr. Nguyen Duy Anh commented that this factor, combined with interest rate policy, created a significant difference compared to the initial forecast.

Interest rates also contribute significantly to this optimistic picture. Initially, experts were concerned that 2025 would see interest rates rise, putting pressure on the market. However, with the latest message from the Government, interest rates have not only been kept stable but also tend to decrease in certain industries. This flexible adjustment has become a solid foundation, helping the stock market to flourish from the beginning of the year and strengthening confidence in the adaptability of the Vietnamese economy in the face of challenging global conditions.

A notable trend in recent years is that the cash flow in the market is gradually changing direction. If in the past, individual investors often directly participated in stock trading with cash flow "in and out quickly", leading to strong fluctuations, now they are increasingly looking to investment funds, especially open-end funds. At VCBF, the cash flow into the fund in 2024 doubled compared to 2023. By the first months of 2025, this number continued to skyrocket, 2-3 times higher than the same period last year.

This shift is significant. Cash flow into the fund is often long-term investment, with few sudden withdrawals, thereby helping to minimize sharp increases and decreases in the market. Compared to the previous period, when personal cash flow dominated, causing the VN-Index to easily plummet or explode abnormally, the market is now gradually becoming more stable. This not only reflects the maturity of investors but also shows growing confidence in professional investment channels and the sustainable prospects of Vietnamese securities.

Great opportunities amid global risks

Looking ahead to 2025, Mr. Nguyen Duy Anh said that the Vietnamese stock market is expected to experience significant fluctuations. The main reason comes from US trade policy under President Donald Trump's second term, with decisions that can be issued in just a few days or weeks, making the global market unpredictable. This is a factor that requires investors to accept certain risks, but at the same time affirms that Vietnam's long-term potential is still very positive. However, in such a challenging context, Vietnam still possesses its own advantages to create a breakthrough momentum.

The economy is expected to grow by over 8%, creating a solid foundation for the stock market. If we calculate the 18-20% growth in corporate profits this year, the market's P/E is only about 12 times - a very attractive level compared to other countries in the region. Notably, while foreign investors have continuously withdrawn net capital since 2024, the market has not plummeted as sharply as before. 3-4 years ago, selling pressure from foreign investors could have caused the VN-Index to fall by 15-20%, but now the index is only moving sideways. This shows that domestic cash flow is strong enough to sustain the market, creating an important support.

Furthermore, factors such as the prospect of market upgrade and the implementation of the new KRX technology system are expected to attract foreign capital back in the next 2-3 years. With these foundations, experts believe that the Vietnamese stock market can completely rise to a valuation level commensurate with the region, opening a new and promising development phase.

Despite the positive domestic outlook, the global market still has many potential risks. As the third largest trade surplus partner with the US, Vietnam may face the risk of being subject to tariffs to reduce the trade deficit. While the US has imposed tariffs on many other major partners, Vietnam has not been targeted yet, but this possibility remains a question mark. However, the Government has proactively responded by increasing LNG imports for power projects, signing contracts to buy aircraft and many other items from the US, in order to balance trade relations and minimize risks.

In addition, the possibility of the US Federal Reserve (Fed) delaying interest rate cuts is also a factor to consider. However, these fluctuations are considered to be short-term. In the long term, Vietnam's growth momentum lies in its innovation strategy and attracting high-quality FDI. Unlike the previous period, when FDI from Samsung or LG mainly focused on assembly with low added value, Vietnam is now aiming to master technology. If successful, after 5-7 years, this will be the foundation for double-digit GDP growth, opening a new era for both the economy and the stock market.

Need to take advantage of long-term opportunities

As the economy grows and corporate profits improve, almost every sector has the opportunity to benefit. With a GDP target of 8-10%, listed companies - which are industry leaders - are expected to grow profits by 15-20% per year in the next 5-10 years, one and a half to double the GDP growth rate. This is a great potential for the stock market to break out.

More specifically, the information technology industry, despite being sold off heavily recently, is still highly regarded for its long-term prospects. Industrial park enterprises are also becoming attractive destinations for cash flow, thanks to the wave of FDI pouring into Vietnam. In addition, the electricity and water sectors - essential for production - also promise stable growth. Mr. Nguyen Duy Anh believes that investors should not only look at the industry, but also focus on each specific enterprise, because even in difficult times, there are still companies that rise to the top.

In a volatile market, individual investors need to develop a prudent strategy. Diversifying investments, rather than putting all their capital into one place, will help reduce the risk of sudden market reversals. Risk management should be a priority, rather than chasing short-term profits.

For those who do not have time to closely monitor market developments, open-end funds are a worthy option. With a diversified portfolio and flexible investment strategies, open-end funds not only provide profit opportunities but also reduce management pressure for investors. This is a practical approach, suitable for the current period where opportunities and challenges are intertwined.

With an increasingly strong economic strength, stable domestic cash flow and the prospect of upgrading within reach, the Vietnamese stock market is facing a great opportunity to affirm its position in the region. Although challenges from the trade war or the Fed's policies may create some short-term waves, Vietnam's long-term growth story is still being written with bold strokes. And in that, the stock market is the clearest mirror, ready to welcome the light of a new era.

Source: https://thoibaonganhang.vn/nha-dau-tu-co-the-ky-vong-gi-tu-ky-nguyen-vuon-minh-161872.html