Market Bullseye 01 December 2025 - A Lone Pillar Bearing the Heavens

WEEKLY NOTE: The VN-Index posted its fourth consecutive weekly gain, rising 2.28%, largely driven by the overwhelming contribution of the Vingroup shares. Our RS Rating system highlights Real Estate and Tourism & Entertainment as the two standout sector leaders on the short-term horizon. Foreign investors scaled back their net selling to roughly VND 600 billion, while proprietary desks delivered a notable net buy of nearly VND 1,000 billion — a constructive signal suggesting that domestic capital is becoming more assertive at current price levels.

Looking ahead to next week, investors should consider maintaining an equity allocation in the 70–80% range, depending on individual risk appetite. If the market unexpectedly breaks above the 1,700-point barrier through aggressive, index-heavy moves, trimming exposure back toward the 50–60% range should be considered to safeguard recent gains. As previously advised, the use of leverage should only be contemplated when the VN-Index is trading within the 1,650 ± 20 zone.

I. Macroeconomic Overview:

Figure 1: Key indicators in the money market.

Interbank overnight rates surged to 5.74% over the past week, rebounding sharply after easing below 5% in the previous period. On the open market operations (OMO) channel, the State Bank of Vietnam injected a net VND 73,923 billion to support system liquidity, pushing outstanding OMO volume above VND 330,000 billion — a new all-time high. The central reference rate continued to edge up to 25,155 VND/USD, while the free-market exchange rate retreated to around 27,700 VND/USD. EUR and GBP strengthened by 200–300 VND depending on the bank, whereas JPY continued to slip modestly.

The late-month spike in overnight rates is a fairly typical pattern, especially during year-end liquidity stress periods. The SBV’s decisive return to large-scale net injections — after weeks of maintaining a cautious stance on OMO — suggests that policymakers may be deliberately building liquidity headroom for one final credit-growth push before year-end, laying the groundwork for more ambitious expansion targets in 2026.

Figure 2: U.S. inflation and unemployment trends over the past three years. Source: St. Louis FED (2025).

Over the past week, U.S. financial markets once again left global investors scratching their heads as the CME FedWatch probabilities swung sharply back toward a 0.25% rate cut at the December FOMC meeting, with odds climbing above 83%—a dramatic reversal from just one week earlier when expectations had dropped below 30%. In reality, recent data show that the U.S. labor market and broader economy remain remarkably resilient. The unemployment rate has risen steadily from 4% to 4.4% since the start of the year—bringing the labor market closer to its natural rate of unemployment, a development often viewed as healthy. However, inflation continues to display an uncomfortably persistent profile, having failed to return to the 2% target since April 2021.

If inflation does not ease meaningfully in the final months of the year, the FED will find itself caught in a genuine policy dilemma: policy rates are now approaching the neutral range, and a sudden reversal toward rate hikes would almost certainly undermine market confidence in the FED’s credibility. Meanwhile, the Trump administration has strong incentives to push for additional rate cuts as U.S. public debt has swollen to record levels and interest expenses have already reached USD 970 billion this year. Keeping inflation moderately elevated also conveniently erodes the real burden of this massive debt stock over time. Above all, it is the increasing unpredictability of monetary policy—and the growing concern over the independence of the Federal Reserve—that poses the greatest challenge to long-term confidence in the U.S. financial system.

Story of the Week:

In recent weeks, the market has been advancing on a distinctly unhealthy footing, with most of the upward momentum coming from a handful of large-cap pillars and almost no breadth to speak of. More than ever, investors are looking for the return of a sector capable of providing genuine leadership—both for the market and for the broader economy. That sector, of course, is banking. The key question now is whether bank stocks still have enough fuel to enter a new bullish cycle.

From a profit-before-tax (PBT) growth perspective, not all banks delivered impressive results. Among the top 10 performers, four banks posted growth of less than 8%—meaning they lagged behind Vietnam’s GDP growth over the first nine months of 2025. In contrast, the most striking results came from smaller banks such as ABB, KLB, and BVB, all of which reported multi-fold profit increases, along with NVB, which swung decisively from loss to profit. Overall, the balance still tilts toward the high-growth cohort, with more than half of the sector posting profit growth above 15%. Critically, when compared with the VN-Index’s 33.49% year-to-date gain, only 11 out of 27 banks have outperformed the broader market, and just seven stocks have gained more than 50%. This indicates that the upswing since June was far from overheated and has largely been “cooled off” during the most recent correction. In terms of valuation, both sector P/E and P/B are now hovering around their five-year averages. As such, the appeal of bank stocks will depend heavily on whether forward earnings expectations are strong enough to justify a rerating.

Looking ahead, the potential for earnings improvement is entirely plausible. Many banks have willingly compressed NIM in recent quarters to support customers, which in turn dragged down ROE. That said, several names—CTG, VPB, SSB, TPB, MSB, EIB, VAB, and PGB—managed not only to reduce NIM to provide relief but also to improve ROE year-on-year, bucking the sector trend. As the pressure to support the economy gradually subsides, the room for NIM expansion becomes increasingly visible. Asset quality trends are also constructive: 17 out of 27 banks reduced their NPL ratios year-on-year. Half of these banks have proactively strengthened their provisioning buffers—most notably CTG, VPB, STB, ABB, and KLB, all of which sharply increased provision expenses while still delivering robust profit growth. Conversely, banks with provision coverage ratios below 60% are likely to face substantial provisioning pressure in Q4, which could weigh meaningfully on near-term earnings.

Overall, the banking sector is well-positioned to deliver further improvements in 2026 through NIM recovery and gradually easing credit risk. These factors provide a credible foundation for valuations to re-rate back toward more attractive ranges. From this perspective, the probability that bank stocks reclaim their role as the market’s leadership group is entirely achievable.

Table 1: Selected Statistical Indicators for Banking Stocks (Dark green – improvement YoY; red – deterioration YoY; light green – no YoY comparison available). Source: Vietstock (2025); TCBS (2025).

II. Market Developments:

The VN-Index recorded its third consecutive week of gains, rising 2.18% to 1,690.99 points, once again approaching the 1,700-point milestone, which it has failed to breach four times since August. In contrast, the VN30 displayed notable weakness, increasing only 1.26% to 1,923.92 points. On other exchanges, the HNX-Index continued to decline by 1.22% to 259.91 points, while the UPCoM-Index edged up slightly by 0.24% to 118.98 points. Average matched trading liquidity on HOSE reached VND 18,656 billion, slightly down 1.28% from the previous week, with one session falling to nearly VND 15,000 billion. Net selling pressure from foreign investors dropped sharply to just VND 589 billion, while proprietary trading increased its net buying to VND 935 billion. Overall, the market’s weekly gain was not particularly robust, as the rally was largely driven by the Vingroup shares, resulting in a distorted index performance. The persistent “green on the surface, red at the core” pattern over multiple sessions has dampened investor sentiment, keeping liquidity subdued. Consequently, even though the strong resistance zone of 1,670–1,680 points was breached, this does not imply that the potential supply in this area has been fully absorbed, as most investors across various stock groups remain either at a loss or with negligible profits, and thus are hesitant to sell. It is worth noting that if this negative “index-propping” behavior persists for several more weeks, the market could recreate a scenario reminiscent of the VN-Index rise from 1,400 to over 1,500 points in 2022 before a sharp collapse. Nevertheless, the current macroeconomic backdrop is sufficiently attractive to reduce the likelihood of a similar negative outcome, even in the face of continued corrective movements.

In terms of point contributions, VIC continued to lead with +27.6 points, followed by VPL (+8.66), VHM (+3.40), GEE (+2.33), and VNM (+2.03). On the downside, the stocks exerting downward pressure on the index included VCB (-2.96), HPG (-1.44), FPT (-1.38), STB (-1.11), and TCB (-0.78). Market P/E rose to 14.96x, approximately 0.45x above the five-year average, indicating that valuations remain within a safe range. Notably, out of the market’s total gain of roughly 36 points last week, VIC, VPL, and VHM alone contributed 39.66 points. In other words, excluding these three stocks, the market essentially experienced a weekly decline, with the main adjustment pressure coming from the banking sector.

Figure 3: Market valuation based on P/E, tracked using AWMFUND’s proprietary tool.

III. Investment Perspective and Strategy from AWMFUND:

Our analytical tools indicate two sectors leading the short-term trend: Real Estate and Tourism & Entertainment. Among them, the Real Estate sector has remained a leading performer for the second consecutive week, showing notable improvement in absolute terms. Key representative stocks include PIV, HPI, and VIC (Real Estate); DNT, VPL, and ATS (Tourism & Entertainment). It is evident that the breakout in these two sectors is primarily driven by VIC and VPL, while the other names appear largely obscure and exhibit minimal trading liquidity.

Figure 4: Sector strength map based on RS Rating, AWMFUND’s proprietary tool.

Last week, smart money concentrated on three stocks: KDH (Real Estate), NAB (Banking), and GEX (Industrial Services). It is apparent that, for all three stocks, this consensus remains fragile, and one source of capital could easily dominate the other two. This indicates that investors are still extremely cautious in the face of the current extreme movements of the broader index.

Figure 5: Smart money flow map for individual stocks from RS Rating, AWMFUND’s proprietary tool.

Strategic Recommendations:

Interbank overnight rates developed last week largely in line with the typical pattern for a month-end week during the year-end peak period. The SBV active liquidity injections helped create a more abundant money market, facilitating the conditions for a significant credit growth wave. At the same time, this move had a positive effect on asset markets closely linked to short-term money supply. The accommodative policy is likely to continue through the end of December to support year-end payment activities for 2025 and provide appropriate credit momentum to achieve ambitious socio-economic targets. However, this also implies a strong tightening could occur in January 2026 to absorb excess liquidity, taking advantage of the seasonal credit lull before Tet. Internationally, the possibility of a Fed rate cut in the December meeting remains highly uncertain as market expectations have been volatile and October economic data are not yet conclusive. Investors should closely monitor developments in major financial markets, given the increasing integration of the Vietnamese stock market into global financial flows.

In the equity market, the excessive influence of the Vingroup share continues to distort the index, making it less representative of the broader market condition. Most other stocks remain under clear selling pressure, weighing on investor sentiment. However, the sharp decline in foreign net selling and decisive domestic proprietary net buying is a positive signal, indicating that attractive opportunities exist for smart money even amid elevated risks. Looking ahead, the likelihood of VN-Index successfully breaching the 1,700-point mark remains low considering previous failures. Moreover, profit-taking pressure from short-term bottom-fishing investors in recent weeks may not yet have been fully absorbed, particularly as many stocks remain around their short-term lows, leaving investors hesitant to sell. If the market continues to rely on extreme index-pulling actions, most investors are unlikely to benefit from such moves, so immediate deployment of funds is not recommended. In a more positive scenario, VN-Index could retreat toward 1,650 points to accumulate momentum and create conditions for a more broadly-based rally. If monetary easing is implemented through year-end, a December market upswing is entirely plausible.

For the coming week, investors should maintain equity weightings at around 70–80% of their portfolio, depending on risk appetite. If the market surpasses 1,700 points due to extreme index-pulling, reducing exposure to 50–60% should be considered. Leverage use remains safe only when the market fluctuates around the 1,650 ± 20-point range, as previously recommended.

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Disclaimer: This report and its content are provided for informational purposes only and do not constitute a recommendation to buy or sell any securities. Investors should make decisions based on independent advice and their own financial situation. All views expressed may change without prior notice. Please credit the source when using information from this report.

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