In The Ballad Fund’s December 2025 update, SGI Capital asserts that the era of cheap money has ended, and tightening liquidity will pose a significant challenge for financial assets accustomed to rapid credit cycles.
The recent adjustments in interest rate-sensitive stocks and the decline in trading volumes over the past four months accurately reflect the overall liquidity landscape of the economy.
 Mr. Le Chi Phuc – CEO of SGI Capital
|
On a positive note, the Fund anticipates foreign capital inflows to rebound in 2026, driven by reduced currency risks as interest rates rise, Vietnam’s FTSE Russell upgrade, and global investment funds returning as valuations become more attractive.
However, SGI Capital remains cautious about domestic investor flows. Analysts highlight that interest rate trends will remain the primary driver of local capital, especially with rising margin debt and declining cash balances.
Many domestically favored stocks have dropped 20-30% from their peaks, while margin debt remains unchanged, creating an unprecedented market paradox. According to SGI Capital, despite the VN-Index reaching new highs, some accounts face margin call pressures. The Fund warns that higher interest rates and tight liquidity will continue to strain accounts heavily leveraged through margin and short-term financing.
Notably, SGI Capital observes that the speculative frenzy of late 2025 is re-emerging in early 2026, indicating persistent investor impatience and dominance of hot money. “Despite January typically being a strong month, we see no conditions for a sustainable long-term uptrend,” the Fund notes.
Monetary Policy Tightens, Real Estate Brakes Applied?
In its update, SGI Capital reports that the State Bank of Vietnam (SBV) has set the 2026 industry credit growth limit at 15%, significantly below 2025’s 19% growth and the 20% target aligned with 10% GDP growth. The SBV also caps quarterly credit growth at 25% of the annual limit. The Fund estimates that, excluding restructuring banks, most banks may only achieve 13% credit growth this year.
With credit/GDP exceeding 146% and net LDR surpassing 110%, SGI Capital notes the system has maximized short-term liquidity support from the SBV and Treasury to fuel credit growth over the past two years. The banking sector has reached a point where high-speed credit expansion without substantial rate hikes or systemic risks is no longer feasible. “The SBV’s credit reduction is timely and necessary to ease short-term liquidity pressures, cool rate competition, and mitigate bad debt risks akin to 2010-2012,” the Fund explains.
In this context, SGI Capital views fiscal policy and public investment as the primary growth drivers, given the substantial remaining fiscal space. However, the sustainability of growth hinges on the efficiency of public investment choices. The 10-year Government Bond yield, reflecting market sentiment on fiscal discipline and liquidity, has risen steadily over the past year with recent acceleration, according to SGI Capital.
Another critical shift, according to Fund analysts, is the regulatory cap on real estate credit growth at the industry average. Given real estate’s 30%+ annual credit growth in recent years, this “represents a sharp brake on an overheated market.”
Four years of ultra-low rates (2020-2021, 2024-2025) fueled investment/speculation, while prolonged legal bottlenecks constrained new supply, driving two price booms across most real estate segments. With record project approvals and launches in 2026, credit restrictions and rising rates could reverse supply-demand dynamics and price trends.
2026 Investment Strategies
SGI Capital believes the economy and stock market exhibit late-cycle signs: high debt levels, rising rates, and shrinking asset liquidity preceding price declines.
The Fund advises against high buy-and-hold allocations, especially in cyclical, rate-sensitive sectors like financials and real estate. Large-cap companies with strong cash flows, balance sheets, competitive positions, foreign currency revenues, and essential products may better retain capital.
“In an environment where cash is scarce and valuable, maintaining a high-quality portfolio with significant cash reserves will help navigate challenges and seize buying opportunities in a volatile year,” SGI Capital concludes.
– 08:04 14/01/2026
2026 Stock Market Outlook: Stable, Widespread, and High-Quality Growth Predicted by Nguyen Duy Quang (TVAM)
The Chief Investment Officer of Thien Viet Asset Management (TVAM) offers an optimistic outlook on market prospects, while cautioning against impulsive buying and emphasizing the importance of selective, strategic investment.
Is Renting Cheaper Than Buying a Home? Dr. Nguyễn Văn Đính Highlights the Growing Disparity Between Property Prices and Rental Rates
Amid soaring property prices in Hanoi and Ho Chi Minh City, renting has emerged as the go-to choice for young individuals.
Ho Chi Minh City and Surrounding Provinces Witness Surge in Approved “Paper Home” Sales Projects in Late 2025
Local Department of Construction statistics reveal that 34 projects, comprising nearly 16,000 units, are eligible for future home sales and mobilization across 12 provinces and cities in the final month of 2025. Ho Chi Minh City leads with 9 eligible projects.
Unlocking Double-Digit Economic Growth: Key Insights and Investment Opportunities for 2026
At the prestigious FChoice 2025 Awards Ceremony and the insightful seminar titled “Double-Digit Economic Growth Drivers and Investment Opportunities in 2026,” hosted by CafeF, esteemed experts and business leaders shared a wealth of compelling insights.
Bank Projects Over 7 Trillion VND in Profits for 2026, Credit Growth Surges 17%
In the first nine months of 2025, the bank’s pre-tax profit soared to VND 6,739 billion, a remarkable 1.5 times increase compared to the same period in 2024, surpassing its annual target by 104%.
