The VN-Index Surges to a 3-Year High, but Many Investors’ Accounts are Yet to Reap the Benefits: Insights from VPBankS Experts

Vietnamese stocks have been on a positive trajectory, experiencing a strong rebound since the tariff crisis. From its low on April 9th, the VN-Index has surged by almost 250 points, approaching the 1,340-point mark, the highest level in over three years (since April 2022).

Investment Opportunities Remain with Relatively Safe Entry Valuations

At the event “Vietnam and the Indices: Financial Prosperity,” Mr. Dao Hong Duong, Director of Industry and Equity Analysis at VPBank Securities (VPBankS), asserted that large-cap stocks have had a significant impact on the VN-Index’s recovery.

The market has witnessed a significant divergence in the performance of different stock groups, with some stocks surging over 100% while many others, including large-cap stocks, have seen more modest gains of less than 10%.

According to statistics, as of now, on the HoSE, there are 42 stocks that have risen more than 30%, 215 stocks that have increased between 10% and 30%, and the remaining 154 stocks have posted gains of less than 10%. More than two-thirds of the market has seen increases of less than 30%, and half of the stocks on the HoSE have underperformed the VN-Index. This explains why many investors’ portfolios have not yet “recovered.”

Among the VN30 or VN50, 27 stocks have outperformed the VN-Index, including port stocks, Vingroup stocks, NVL, and MWG. Compared to their prices before the decline at the beginning of 2024, these stocks have gained approximately 10-15%.

Turning to the mid-cap group, VPBankS statistics show that most of the VN50 stocks have risen in line with or underperformed the VN-Index (about 40 stocks). The expert also pointed out some understandable underperformers, such as industrial real estate stocks impacted by tariff news, aviation and oil and gas stocks (also affected by low oil prices), and some modestly performing securities companies.

According to Mr. Duong, investors have only witnessed a small portion of large-cap stocks with impressive gains, and this group has led the overall index back to the 1,300-point level. Many other groups have seen modest gains or have not yet recovered from the tariff-related decline.

In terms of tariffs, investment opportunities in mid-cap stocks remain relatively abundant. Considering the cyclical nature of the seasonality, taking the banking sector as an example, the first quarter of 2025 earnings reports are still positive. Expectations for the second quarter’s earnings, along with the fact that tariff impacts remain at the information level without actual figures on final tax rates, could provide further momentum for the market.

“For many industries and stock groups affected during this period, I believe there are still investment opportunities with relatively safe entry valuations,” the expert clarified.

In reality, Mr. Duong noted that only about 10 stocks in the VN50 index have risen more than 50%, mainly the Gelex Group (averaging 100% increase), HAH, Vingroup, and NVL. If investors do not hold stocks in this group, it will be challenging for their portfolios to match the market’s performance.

Looking back at the same period in 2024, if FPT was not included in investors’ portfolios at that time, it would have been difficult to match the VN-Index’s performance. Therefore, the developments in the first half of this year are not entirely unusual.

Savings Deposits Remain Less Attractive than Stock Investments

Regarding savings deposits by residents continuing to hit new records and the trend of people depositing money remaining high, a viewer opined that people should not deposit money in savings accounts when many stocks currently offer relatively attractive dividend payouts, and there are ample opportunities in the stock market.

In VPBankS’ expert opinion, the over 4% increase in savings deposits over the past time is not a cause for concern. A sharp rise in savings deposits usually results from one of two factors: an upward trend in interest rates or the economy’s capacity to absorb capital. However, neither of these factors currently has a significant impact.

For the banking system, the correlation between deposit growth and credit growth needs to be considered. However, the current growth rates of credit and deposits are quite similar. With the current situation, the banking system and bank stocks will have a relatively stable NIM (Net Interest Margin).

From an investment perspective, VPBankS previously shared a simple approach: calculating the E/P ratio (Earnings per Share to Market Price). Currently, the market’s E/P ratio is about 1.5-2% higher than the average 12-month savings deposit rate. This indicates a significant gap and underscores that savings deposits are less attractive compared to stock investments. We discussed this three months ago, and the disparity has become even more pronounced.

In reality, the expert also believes that most investors only use savings accounts for short-term deposits, while investing in other channels with longer-term horizons offers better profit expectations.