We would like to present you our monthly Macroeconomic & Stock Market Highlights for Vietnam alongside with the monthly performance update of the TIM Vietnam Actively Managed Certificate for March 2025.

Vietnam’s Update – Economy

• Vietnam ended the first quarter with strong economic indicators, reflecting positive momentum in the domestic economy supported by the government’s proactive and tangible policy measures. The recent announcement of a 46% “reciprocal tariff” on Vietnam by President Donald Trump has however introduced a new development to monitor. As negotiations are still ongoing, it is too early to assess the full implications. We will share updated economic projections in our next monthly report.
• Q1 GDP grows 6.9%, the highest in 5 years. The agricultural sector maintained solid growth of 3.7%, supported by stable crop harvests, steady timber output, and particularly strong gains in aquaculture. Industry and manufacturing grew by 7.4%, driven primarily by manufacturing and construction. While March’s PMI reached an expansionary 50.5, uncertainties in global trade may lead to a temporary slowdown in the coming quarters. In contrast, construction is expected to accelerate due to a more aggressive push in infrastructure investment. The services sector expanded by 7.7%, fueled by a 29.6% y/y increase in international tourist arrivals (reaching 6 million), and a gradual rebound in domestic consumption, contributing to a
  9.9% rise in retail sales.
• Inflation remains under control. The CPI rose 3.1% y/y, mainly driven by a 3.8% increase in food prices and a 14.6% surge in healthcare costs, following government price adjustments and seasonal flu. Higher pork prices and increased costs of eating-out services were key contributors to food inflation, although a 20% year-to-date drop in rice prices helped offset some of the pressure. Meanwhile, a 4% decline in transportation costs—due to reduced post-Tet travel demand and lower oil prices—also helped keeping inflation at manageable levels.
• FDI and trading activities maintained growth momentum. Total FDI registrations reached nearly $11 billion, up 34.7% y/y, while actual disbursements increased 7.2% to $4.9 billion. Brazilian meatpacker JBS S/A announced a $100 million investment to build two new plants in Vietnam, focusing on beef, pork and poultry. Regarding trading activities, exports and imports grew 10.6% y/y and 17.0% y/y respectively, recording the trade surplus of $3.2bn.
• Strengthening global partnership. In early 2025, Vietnam elevated its relations with New Zealand, Indonesia, and Singapore to a Comprehensive Strategic Partnerships (CSP)—the highest diplomatic tier. With these additions, Vietnam now holds a CSP status with 12 countries. The country also welcomed the visits of Singapore’s Prime Minister and Brazil’s President in March, where bilateral deals and supports have been agreed. By strengthening its global network, Vietnam aims to diversify trade flows, reinforcing its position in an evolving global landscape.
• Negotiations on “reciprocal tariff” are starting. In early April, President Trump unveiled a “reciprocal tariff” table using an unconventional calculation method, resulting in a 46% tariff on Vietnam. We view that more as a negotiation tactic as the tariffs that two countries have applied on each other are not much different, and Trump’s purpose was to address the trade deficit between US and Vietnam. Vietnam’s Deputy Prime Minister is visiting the US for negotiations, and some transactions that are based on recent MOUs are expected to be executed in the next few days. Vietnam also asked for a 45-day delay in the imposition of U.S. tariffs. While it is still too early to fully assess the impact, exports and FDI disbursement may face near-term headwinds. General Secretary To Lam and President Trump also held a phone call, which Trump described as “very productive,” though relying on hopes alone may not be a sound strategy. That said, Vietnam has built a diversified trade portfolio, supported by 17 FTAs covering 80% of global GDP (excluding the US), providing access to alternative export markets. It’s also worth noting that these could ultimately burdens US consumers, and given the US goal of containing China’s rise, Vietnam’s strategic location and its role in global supply chains may not be something the US is willing to forfeit.

• Amid global uncertainties, the government is pushing the domestic economy. Investment from the government budget increased by 19.8% y/y. Major investment projects are receiving unprecedented attention from the government with significant amounts of resources allocated. The Prime Minister visited the Long Thanh International Airport again in March, the third time in 4 months. The new terminal of the Tan Son Nhat airport is set to open by the end of April, 3 months ahead of schedule, increasing the existing capacity by 40% to 50 million passengers annually.

Vietnam’s Update – Stock Market

• The VN-Index was flat in March, closing the first quarter of 2025 with a total return of 2.9%. The market gained momentum in the first half of March, supported by strong macro data for January–February and by the Ho Chi Minh Stock Exchange’s (HOSE) announcement of tests of the new KRX system. However, sentiment weakened toward the month-end amid rising uncertainties over global trade, geopolitical tensions, and a $428 million net foreign outflow. Liquidity remained encouraging, with the average daily trading value reaching $817 million, up 31% from the previous month.
• The real estate sector led the gain, while other sectors lagged. The real estate sector rose 18.1%, driven by an uptick in new supply and strong public investment in infrastructure. However, performance was largely concentrated in Vinhomes (VHM) and Vingroup (VIC). The stock prices of both companies have been depressing for a long time due to persisting foreign selling pressure. VHM was oversold as the stock traded at a 2025F P/B of 0.8x in February and now it finally seems to return to its book value. We continue to see more upside. The company is well-positioned to benefit from Vietnam’s infrastructure push and enhanced inter-regional connectivity. VIC’s recent rally was fueled by positive developments at its subsidiaries (Vinhomes got major legal progress on some projects, while its hospitality arm is planning for a listing), but we remain cautious on its outlook as the auto segment continues to face headwinds. On the other hand, the majority of other sectors witnessed a correction, in which technology and energy saw the most significant declines with setbacks of 13.3% and of 8.2%, respectively.
• Vietnam is on track for Emerging Market recognition. FTSE Russell is currently gathering investor feedback to assess the implementation process. While some operational concerns remain, upcoming reports are expected to underscore the significant progress made by Vietnam’s regulatory authorities. We retain our expectation that Vietnam will be upgraded in September 2025, and this could attract $5-6 billion foreign inflow, according to FTSE Russel’s representative.
• A sharp drop in early April – opportunities are now. Despite the positive momentum in March, the unexpected tariff announcement triggered a broad-based correction in the Vietnamese stock market, affecting stocks across the board regardless of fundamentals. With retail investors accounting for over 80% of trading volume, short-term panic selling was inevitable. However, firms directly tied to FDI, and exports make up only 13% of the VNIndex’s market capitalization. This presents opportunities amid the turmoil, especially in defensive, domestically focused sectors—many of which offer dividend yields between 7–10%. While it will take time to fully assess the earnings impact, the correction has pushed the VN-Index to an extremely attractive valuation, with a 2025F P/E of 9.8x.

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Please download the March 2025 Factsheet for our TIM Vietnam Actively Managed Certificate. We are also offering investment advisory mandates and research services for the Vietnamese stock market. Furthermore, we offer our clients Discretionary and Investment Advisory Mandates for the purpose of investing in listed Vietnamese equities.

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