Market Insider – The performance of the Vietnamese stock market this week hangs heavily on the FTSE Russell market classification review, with investors bracing for the results to be announced in the early hours of October 8 (Vietnam time). The benchmark VN-Index is expected to trade sideways in the week of October 6-10 as it awaits the critical announcement.
Recent Market Performance
The past trading period, spanning the transition between Q3 and Q4 2025 (September 29 to October 3), was marked by a sluggish sentiment, according to a report by SHS Securities. The market continued to consolidate within a narrow range, struggling to break past resistance around the 1,700-point mark.
The VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), saw narrow fluctuations around 1,660 points in the first three sessions of the week, accompanied by declining liquidity. Selling pressure intensified in the latter two sessions, resulting in the VN-Index closing the week at 1,645.82 points, a 1.4% drop. This marks the second consecutive weekly decline, though the index remains above the psychological support level of 1,600 points.
Conversely, the VN30 Index, which tracks the 30 largest-cap stocks on HoSE, managed a modest gain of 0.37% for the week, reaching 1,859.51 points. However, it faced selling pressure near its previous peak resistance of around 1,880 points.
- Trading Volume: Volume on HoSE decreased by 10.6% compared to the previous week, averaging 814 million shares per session. SHS Securities suggests this reflects a weakening of cash flow following a period of strong gains.
- Investor Sentiment: Market sentiment remains subdued due to a lack of clear opportunities and increased short-term loss pressure.
- Foreign Flows: Foreign investors were net sellers for the eleventh consecutive week, offloading over 7.2 trillion VND (approximately $295 million) in shares.
Critical Classification Awaited
The near-term outlook for the VN-Index is solely dependent on the forthcoming market classification report from FTSE Russell, a leading provider of global stock market indices, data, and analytics.
Vietnam, with the government’s approval, has set an ambitious goal to be upgraded from a Frontier Market to a Secondary Emerging Market by FTSE Russell this year. Finance Minister Nguyen Van Thang stated mid-month that Vietnam “has been making efforts to meet FTSE’s upgrade criteria.” The organization is scheduled to announce its review results on October 7, which translates to the early morning of October 8 (Vietnam time).
Expert consensus is that the VN-Index will maintain a sideways trend, albeit with a narrowing range, until the FTSE announcement. Pinetree Securities Analyst Nguyen Tan Phong noted that large-cap stocks like VIC, VRE, and LPB are expected to stabilize the market early in the week.
Phong remains hopeful for a market upgrade. However, he cautioned that a strong rally beyond previous highs will require a significant return of capital to the banking sector and a subsequent spread to other industry groups. Absent this, the index could face a pullback until the Q3 earnings reports are fully released. A failure to secure the upgrade, while considered a low probability event, could trigger a negative signal and potentially lead to a medium-term correction lasting months.
The nearest support level for the VN-Index is projected to be the 1,600 – 1,630 range, with nearby resistance seen at 1,660 – 1,680.
Investment Strategy Ahead
In light of the uncertain environment, market participants are advised to adopt a cautious, risk-managed approach:
- Risk Management: Vietcombank Securities (VCBS) recommends that investors prioritize portfolio risk management while awaiting both the FTSE Russell results and the Q3/2025 business results from listed companies.
- Focus on Fundamentals: SHS Securities suggests the market is entering a consolidation phase. Investors should reassess fundamentals, Q3 macroeconomic data, and update their outlook on corporate earnings and growth prospects for the year’s end.
- Maintain Rational Allocation: Investors are advised to maintain an appropriate proportion of cash to stocks, targeting companies with strong fundamental foundations, market-leading positions in strategic sectors, and superior growth potential.
Ultimately, both VCBS and SHS recommend that investors hold off on making major new investment decisions until the crucial market upgrade assessment is officially announced.
