Market Bullseye 15 December 2025 - Unbound Descent

WEEKLY NOTE: The VN-Index suffered its steepest weekly decline since the U.S. tariff shock in April, plunging by as much as 5.42%. The RS Rating system currently fails to identify any sector capable of assuming price leadership across either the short-term or medium-term horizons. Foreign capital flows simultaneously reversed sharply, posting net selling of nearly VND 5.7 trillion, while proprietary trading desks remained cautious, recording net buying of less than VND 400 billion.

Looking ahead, investors who have proactively reduced equity exposure to the 40–50% range in line with prior recommendations may consider selectively increasing allocations by an additional 10–20%, depending on individual risk appetite. New deployments should focus on fundamentally sound stocks that align with the key macro themes for 2026, trade at attractive valuations, and have already undergone a minimum 10% price correction over the past week. The use of leverage should be strictly avoided under current market conditions.

I. Macroeconomic Overview:

Figure 1: Key indicators in the money market.

Interbank overnight rates surged to 7.37% last week, marking the highest level since November 2022. On the open market, the State Bank of Vietnam (SBV) conducted an additional VND 12,938 billion net liquidity injection and rolled out its second FX swap operation of the month, with a USD 500 million quota, bringing the total short-term liquidity supplied to the system to approximately VND 25 trillion. The central exchange rate edged slightly lower to VND 25,148/USD, while the free-market exchange rate eased into the VND 27,100–27,200/USD range. In contrast, EUR and GBP rates rose by VND 70–140, depending on the bank and transaction side.

Despite overnight interbank rates remaining anchored above 7%, the scale of SBV’s net injections has narrowed materially in recent weeks, signaling the regulator’s assessment that liquidity pressures are now evolving along an expected trajectory and are likely to stabilize in the near term. At the same time, exchange-rate pressures are expected to ease relative to the previous period, following the Federal Reserve’s latest 25-basis-point rate cut, coupled with the meaningful upward adjustment in domestic interest-rate levels.

Figure 2: Household savings as a percentage of total disposable income across countries in 2024. Source: OECD (2025); FRED (2025).

Recently, China unveiled a 19-point action plan aimed at rebalancing supply and demand while reinvigorating domestic consumption. According to the National Bureau of Statistics of China, retail sales of consumer goods reached approximately USD 6.8 trillion in 2024, nearly twice the country’s total merchandise exports of USD 3.577 trillion. However, since 2019, retail sales have expanded at an average annual rate of just 3.2%, lagging even GDP growth over the same period. This divergence suggests that a successful recovery in domestic consumption could generate spillover effects far exceeding those of the export-led growth model that has dominated in recent years. A critical bottleneck that must be addressed is China’s structurally high household saving propensity, which has become deeply embedded in consumer behavior. According to the World Bank (2024), China’s household savings rate currently stands at 38% of disposable income, markedly higher than that of the United States (4–6%) and Europe (3–15%). Under a scenario in which this ratio is halved over the next decade, annual retail sales growth could receive an incremental boost of around 2 percentage points, even before accounting for income growth effects. Such a shift is increasingly plausible as China undergoes a pronounced generational transition, accompanied by visible changes in consumption patterns. HSBC (2025) estimates that Gen Z accounts for only about 20% of the population, yet contributes nearly 40% of total retail sales. Coupled with significantly lower logistics costs compared with the U.S. market, China is poised to become a key end market for Vietnamese goods in the coming years—albeit one where opportunities will be highly selective and certainly not universal.

Story of the Week:

In 2025, global trade faces mounting challenges amid the resurgence of protectionism, sparked by the Trump administration’s abrupt tariff measures. Nevertheless, Vietnam’s import–export activity is still expected to set a new record, with total trade turnover reaching USD 840 billion after 11 months, up 17.2% year on year. Port operations stand to benefit directly from this trend, as throughput expands on both the export and import fronts. Previously, skepticism had emerged around Vietnam’s Master Plan for Seaport System Development, particularly as container volumes by 2030 were projected at 46.3–54.3 million TEUs, implying a CAGR of 7.6–10.5%—concerns that intensified after the United States initially announced a 46% tariff on Vietnamese goods. However, following more constructive negotiation outcomes and the rapid expansion of alternative markets such as Japan, South Korea, Latin America, and the Middle East, these growth assumptions no longer appear unrealistic. From a broader perspective, Southeast Asia currently accounts for 14.1% of global container throughput, ranking second only to East Asia (FPTS Research 2025). Singapore alone handled more than 41.1 million TEUs in 2024 (+5.7% YoY), with over 90% being transshipment cargo—underscoring the region’s rising demand for large-scale international transshipment hubs. Despite the favorable long-term outlook, Vietnam’s port system toward 2030 still faces several structural risks that could weigh on operational efficiency and profitability. Chief among these is the mismatch between berth investment scale and hinterland connectivity, leaving many ports underutilized relative to their designed capacity. In addition, international transshipment cargo remains limited (around 5%), with operations still heavily reliant on feeder routes—small-vessel services transporting containers from Vietnamese ports to major hubs such as Singapore or Hong Kong before onward connection to intercontinental mother vessels.

Encouragingly, these positive trends have begun to translate into financial results among the ten largest listed port operators by market capitalization, with nine out of ten reporting revenue growth in the first nine months of 2025 compared with the same period in 2024. Median net profit growth reached 27.4%, albeit with pronounced dispersion across companies. CDN stands out with a compelling growth profile while trading at a valuation below the sector median. From a long-term perspective, SGP merits particular attention given the potential upside from the Can Gio International Transshipment Port project, which carries a total investment of USD 4.8 billion and has been approved by the Prime Minister. The project is being developed as a joint venture with Terminal Investment Limited Holding S.A., backed by MSC—the world’s largest shipping line—a critical factor in securing direct calls by intercontinental vessels. At present, however, SGP’s operating performance remains constrained by the prolonged relocation from the Nha Rong–Khanh Hoi area to Saigon–Hiep Phuoc Port, a process that has dragged on for more than a decade due to the absence of a final decision on compensation and support mechanisms. Should this bottleneck be fully resolved, SGP’s financial position and operating efficiency are likely to improve markedly in the coming years.

Table 1: Key financial and operating indicators of listed port operators during the first nine months of 2025. Source: Compiled from TCBS (2025).

II. Market Developments:

The VN-Index recorded its sharpest weekly decline since the April 2025 tariff shock, plunging 5.42% to close at 1,646.89 points and effectively erasing all gains accumulated over the prior three weeks. The VN30 underperformed further, falling 5.49% to 1,867.03 points. The HNX-Index declined by 4.05% to 250.09 points, marking its lowest weekly close since late July 2025. Meanwhile, the UPCoM-Index proved more resilient, easing just 1.02% to 119.26 points and remaining near its highest level in more than a decade. Average matched trading value on HOSE fell 6.45% week on week to VND 18.8 trillion, signaling a renewed weakening of capital inflows after the market’s sluggish recovery in recent weeks. Foreign investors abruptly reversed course, posting net selling of VND 5.7 trillion on HOSE, largely concentrated in VPL (VND 2.6 trillion). In contrast, proprietary trading desks continued to post net buying of VND 376 billion, maintaining a broadly neutral stance. While the negative turn had been foreshadowed by unfavorable money-market conditions and only marginal liquidity improvement as the index crossed 1,700 points, the sharp sell-off in the final session still came as a surprise to most investors. From a technical standpoint, the Connors RSI—a short-term oversold indicator—fell below its reading on 9 April 2025, when the market bottomed amid tariff-related news. This suggests the market has entered an overreaction phase, raising the probability of a near-term rebound. However, the loss of more than 120 points over just four sessions has brought margin risk to the forefront; should the market fail to stabilize early next week, a deeper retracement below 1,600 points driven by forced deleveraging cannot be ruled out.

In terms of point contributions, despite a limit-down session, VIC still made a positive contribution of +2.69 points, followed by BMP (+0.34), QCG (+0.25), SAB (+0.16), and TTF (+0.06). On the downside, heavyweights exerting the greatest drag included VHM (-12.31), VPL (-7.96), VPB (-6.15), TCB (-4.58), and GEE (-3.95), overwhelmingly offsetting the gains from positive contributors. On valuation, the market P/E compressed sharply to 14.6x—roughly in line with the five-year average—reflecting a meaningful discount after the steep correction. Nevertheless, the structural distortion of the index has yet to be fully resolved, as VIC continued to be relatively well supported in the final two sessions while selling pressure began to broaden across the market.

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

III. Investment Perspective and Strategy from AWMFUND:

Our analytical framework currently does not identify any sector playing a leadership role on either the short-term or medium-term horizon, underscoring the destructive impact of last week’s abrupt sell-off, which broadly sapped market momentum. The re-emergence of some clearly defined leading sectors across both timeframes will be a critical prerequisite for confirming a genuinely sustainable market recovery.

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

Smart money over the past week concentrated on six stocks: KDH (Real Estate); VCI (Financial Services); SHB (Banking); and BAF, SAB, and VHC (Food & Beverages). Notably, buying interest in VCI was relatively well balanced across investor groups, while proprietary trading desks remained cautious in the other names. Overall, this represents an encouraging signal that the sharp market sell-off has begun to draw smart money back into the market at an early stage.

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

Strategic Recommendations:

The overnight interbank interest rate surged above 7%, reaching its highest level since November 2022, reflecting significant stress on system liquidity—an indicator of crisis-like conditions. However, the nature of this pressure differs markedly from 2022: (1) macroeconomic stability remains intact, with no systemic shocks; (2) the primary driver is a surge in credit demand to support growth objectives; (3) GDP in 2025 and the growth outlook for 2026 are substantially higher than in 2022–2023; and (4) the real estate market has stabilized. Therefore, macro risks for the monetary market are, at this stage, largely absent, and interbank rates are likely to stabilize soon. Indeed, the State Bank of Vietnam (SBV) has gradually reduced net liquidity injections over the past three weeks, even as overnight rates rose, indicating that policy measures are proceeding along a controlled trajectory. Additionally, state-owned commercial banks—key pillars of the system—have mainly raised short-term deposit rates while making only modest adjustments for 12–36 month tenors, suggesting that the medium-term interest rate environment is expected to remain moderate. Should the scenario from late 2022 repeat, interbank rates could decline sharply in the final two weeks of the month. Concurrently, the recent easing and stabilization of the exchange rate—driven by changes in the Vietnam-U.S. interest rate differential—provides a critical foundation for foreign capital to return to the domestic capital market.

On the equity market, investors experienced the most negative trading week since the early-year U.S. tariff shock, with the benchmark index falling over 120 points across four sessions. The initial adjustment focused on previously overbought stocks, representing a healthy correction for the medium-term trend. However, expectations for a controlled adjustment were disrupted as selling pressure spread widely over the final two sessions of the week. Margin pressure may be increasing, and a sudden dip below 1,600 points cannot be ruled out if the index fails to rebound in the early sessions of the coming week. In the near term, the 1,600–1,620 range continues to serve as critical support, having proven resilient in prior rebounds despite being breached during early November’s adjustment. From a technical standpoint, the market is in a severe oversold condition, comparable to the shock decline following the U.S. tariffs in April, suggesting a high potential for a strong short-term rebound. The absence of immediate bottom-fishing in the sharp drop last Friday likely reflects the speed of the decline in the final 45 minutes, leaving investors unprepared to react. In a positive scenario, the market could rebound strongly and potentially reclaim the 1,800-point mark by year-end, provided that: (1) overnight interbank rates begin to ease in the coming week, lowering short-term capital costs; (2) the market establishes sufficiently influential leading sectors across both short- and long-term horizons; and (3) liquidity improves markedly in tandem with rising prices.

Investors following last week’s guidance may consider increasing equity exposure by 10–20% from the current 40–50% allocation, depending on risk tolerance, prioritizing fundamentally strong stocks aligned with macro priorities for 2026, attractively valued, and discounted by at least 10% during the recent downtrend. Conversely, speculative, high-risk “hot” stocks should be avoided, and leverage is not appropriate under current market conditions.

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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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