JOURNALIST: - What are the potential risks for Vietnam’s stock market in 2025? Do you foresee any “Black Swan” events that could cause significant disruptions?
Mr. NGUYỄN VIỆT ĐỨC: - The most significant risk for 2025 is the uncertainty surrounding Donald Trump’s trade policies. As he assumes the U.S. presidency, there are concerns that he might adopt extreme trade measures, such as imposing a 60% tariff on Chinese goods or a 25% tariff on imports from other countries.
However, I find this scenario unlikely. In a recent interview, when asked about his first 100 days in office, Trump clarified that tariffs are primarily a negotiation tool. If trade partners address key U.S. concerns—such as curbing immigration or increasing imports of American products like energy—these extreme tariff measures may never materialize.
Global financial markets will be watching closely as Trump takes office on January 20, 2025. If his official statements are less aggressive than anticipated, the market could sustain its growth trajectory. Conversely, if tariffs are imposed and only China retaliates, the impact on the global market would likely be minimal. Over the past 5-6 years, the U.S. and China have already adjusted to ongoing trade tensions, reducing the potential fallout of such policies.
A “Black Swan” event, where multiple nations retaliate against the U.S., could create more significant disruptions. However, given Trump’s emphasis on using tariffs as leverage in negotiations, I think this scenario is highly improbable.
- Beyond trade policies, what are the major concerns for investors in 2025, particularly regarding currency stability?
- Currency stability remains a critical factor. Initially, investors expected the U.S. Federal Reserve (Fed) to cut interest rates three times in 2025. However, the Fed has since revised its forecast, planning only two rate cuts. This adjustment has led to a somewhat negative market reaction.
While this might seem concerning, it reflects the resilience of the U.S. economy. This scenario aligns with what economists call a “Goldilocks” economy—not too hot, not too cold—with global economic growth around 2% and inflation stabilizing at approximately 3%. While not overly optimistic, this environment could still support moderate market growth. Many analysts expect U.S. equities to achieve gains of about 10% in 2025.
In Vietnam, the State Bank of Vietnam (SBV) has consistently demonstrated its ability to respond swiftly to exchange rate pressures. For example, when currency fluctuations arise, the SBV has used tools like liquidity withdrawal or required commercial banks to sell U.S. dollars to stabilize the market. These actions have been timely and effective.
This proven track record gives me confidence that the SBV will maintain currency stability in 2025 through coordinated monetary and fiscal policies. That said, Vietnam’s relatively small economy is not immune to global disruptions, and significant international volatility could still have ripple effects domestically.
- What opportunities do you see for investors in 2025?
The past two years (2023-2024) have been characterized by relatively modest growth, with the VN-Index increasing by only 10-12% annually, a slower pace compared to the usual fluctuations seen in both Vietnam’s and global stock markets.
However, 2025 holds promise for stronger performance due to several encouraging factors. Vietnamese businesses have demonstrated robust recovery, with profits growing by 18% over the past two years, while the market's price-to-earnings (P/E) ratio remains attractive at 11-12x. Additionally, Vietnam is anticipated to achieve emerging market status, a development likely to draw substantial foreign investment. Coupled with projected GDP growth of 6.5-7%, these conditions provide a solid foundation for market expansion. If the VN-Index surpasses the 1,400-point mark in 2025, it could potentially exceed 1,500 points by 2026.
- Do you have specific investment strategies for the early part of 2025?
Historically, the VN-Index tends to rise during the first 3-5 trading sessions of the year, with a success rate of about 70%. If market momentum remains positive heading into early 2025, selling stocks prematurely might mean missing out on these gains. I recommend holding onto equities at least through the first three trading days to capture the potential recovery trend.
For longer-term strategies, investment opportunities will depend on market valuations and economic conditions. In a low-valuation, high-growth scenario, growth-oriented investments in sectors like technology, industrials, and luxury goods are likely to perform well. Conversely, for more risk-averse investors, defensive sectors such as retail, healthcare, food, and beverages provide steady returns with lower volatility.
- What are the key factors that will shape Vietnam’s stock market in 2025?
- The global market will closely watch Trump’s trade policies, as less extreme actions than anticipated could bolster investor confidence. Meanwhile, the “Goldilocks” scenario of moderate growth and inflation offers a stable foundation for global equities. Vietnam’s potential upgrade to emerging market status could attract significant foreign capital inflows, boosting liquidity and market growth.
The State Bank of Vietnam’s proactive currency management will be crucial in maintaining exchange rate stability and supporting economic development. Growth-oriented sectors such as technology and industrials stand to benefit from economic expansion, while defensive sectors remain attractive for conservative investors seeking safer options.
As we move into 2025, Vietnam’s stock market presents a mix of challenges and opportunities. While uncertainties around trade policies and global economic conditions persist, the proactive measures of domestic policymakers and the resilience of Vietnamese businesses offer reasons for optimism.
For investors, the key to success will be navigating these dynamics with a clear strategy. Whether focusing on growth sectors or opting for defensive plays, 2025 offers significant potential for those willing to adapt to the complexities of the market.
Let’s look forward to a year of recovery, growth, and opportunity in Vietnam’s stock market.
- Thank you very much!
