Vietnam's Stock Market Poised for $1 Billion Investment Surge

Vietnam's stock market is on the brink of a significant influx of foreign investment, with estimates suggesting that over $1 billion could flow into the market in 2027. Analysts from BIDV Securities (BSC) have indicated that this is an opportune time for investors to consider allocating funds to stocks for medium to long-term goals, citing attractive valuations and expected profit growth.

According to BSC's fourth-quarter strategy report for 2026, despite the market's recent lackluster performance, corporate profit growth remains a bright spot. In the second quarter of 2026, profits across the market surged by 50% year-on-year, extending a positive growth streak over five consecutive quarters. BSC has raised its profit growth forecast for 2026 to 26%, an increase of six percentage points from its July report, with expectations for a further 12% growth in 2027.

“This is an opportune time for investors to consider allocating funds to stocks for medium to long-term goals.”BIDV Securities (BSC)

Notably, the improvement in profits has not yet been reflected in stock prices, leading to more attractive market valuations. As of October 12, the 12-month P/E ratio of the VN-Index, excluding contributions from major Vingroup stocks, stood at just 10.5 times, significantly lower than the average of 13.7 times. Furthermore, the projected P/E for 2027 is anticipated to drop to around 9.5 times, representing a nearly 30% discount compared to the average valuation.

While profit outlooks and valuations appear favorable, liquidity remains a significant challenge for the market. BSC has noted signs of improvement in banking liquidity, with the gap between deposits and credit narrowing for the first time in 11 quarters. As of August, this gap decreased from 2.8 trillion VND ($119 billion) to 2.7 trillion VND ($116 billion).

“The improvement in profits has not yet been reflected in stock prices, leading to more attractive market valuations.”BIDV Securities (BSC)

Looking ahead to 2027, BSC expects credit supply to gradually improve, supported by attractive deposit interest rates of around 8-10% that are expected to draw in more capital from the public. The anticipated decline in interbank interest rates could also alleviate short-term funding pressures. BSC has increased its probability assessment for interest rate reductions in 2027, based on the government's commitment to monetary policy reforms.

Foreign capital inflows are projected to shift positively as well. In the first nine months of 2026, foreign investors sold a net 98.29 trillion VND ($4.1 billion), a figure that has remained stable compared to the previous year. However, BSC notes that the net selling pressure has significantly decreased in the third quarter compared to the second quarter, partly due to passive capital flows linked to Vietnam's market upgrade.

“The current conditions are favorable for investors to gradually allocate capital into stocks with a long-term perspective.”BIDV Securities (BSC)

Looking to 2027, BSC estimates that Vietnam's stock market could receive around 33 trillion VND ($1.27 billion) related to market upgrades. This capital is expected to be allocated in phases, with 141 million USD in September 2026, followed by 282 million USD in March 2027, and approximately 494 million USD in each of June and September 2027.

In summary, while liquidity remains a critical factor to monitor, BSC believes that the current conditions are favorable for investors to gradually allocate capital into stocks with a long-term perspective. The combination of improving liquidity, attractive valuations, and a positive profit outlook suggests a promising environment for investment in Vietnam's stock market.

In contrast, Cambodian media coverage has focused on the broader regional implications of Vietnam's anticipated investment surge. According to CamboJA News, the influx of foreign capital into Vietnam's stock market is expected to enhance regional economic stability, particularly as Cambodia continues to strengthen its own financial markets. The Cambodian perspective emphasizes the potential for increased competition in attracting foreign investment, highlighting that Cambodia must also enhance its investment environment to retain its share of foreign capital.

While Vietnamese analysts stress the immediate benefits of the investment surge, Cambodian outlets frame it as a call to action for their own market reforms. This divergence in framing underscores the interconnectedness of ASEAN economies, where developments in one country can significantly impact its neighbors.