Vietnam August 2026 Outlook – Strong PMI, FDI and FTSE Upgrade Lift Sentiment

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 August 2026.

Watch our video recap of key takeaways of the Vietnam Marcroeconomic and Stock market in August 2026

Vietnam’s Economy

• Manufacturing momentum strengthened further in August, with the PMI rising to 53.3 from 52.9 in July, supported by faster growth in output and new orders. Input cost inflation eased from July’s peak, while output price inflation also moderated. The improvement in manufacturing activity was consistent with strong 8M/2026 trade growth, with exports and imports increasing 22.4% and 35.3% y/y, respectively. The cumulative trade deficit remained at USD20.5 billion, with August trade deficit narrowed to close to zero as import growth moderated while exports maintained strong momentum. As highlighted previously, Vietnam’s role as a major assembly hub for global electronics manufacturers such as Samsung and LG means that stronger production typically requires higher imports of components ahead of finished goods exports. With new orders and production activity remaining firm, we expect the trade deficit to narrow further toward year end.
• FDI disbursement reached USD17.2 billion, up 12.0% y/y, with manufacturing continuing to attract the largest share of investment. Major foreign manufacturers continued to expand their presence in Vietnam. Foxconn announced plans to invest an additional USD265 million in its manufacturing operations, bringing its total registered investment in Vietnam to nearly USD5 billion. Investment interest also remained broad based beyond manufacturing, with Nexif Ratch Energy advancing a 102 MW wind power project in central Vietnam with an estimated investment cost of USD122.7 million.
• Retail sales increased by 13.3% y/y in nominal terms. Resilient domestic consumption, together with continued strength in international tourism, remained the key growth drivers. Vietnam welcomed nearly 16 million international visitors during the first eight months of the year, increasing by 14.4% y/y. Fiscal conditions also remain supportive, with the government recording a year to date budget surplus of USD15.8 billion, leaving room for further policy support. The National Assembly also approved a 30% tax reduction for household businesses with annual revenue below USD400,000 for 2026–2027 tax period, which should provide additional support to household income and consumption.
• Public investment remained a key growth driver, with state investment rising 18.5% y/y. Construction activity across major infrastructure projects remained robust. Around the National Day holiday on 2 September, the Ben Luc–Long Thanh Expressway was fully completed, improving connectivity between major industrial hubs and Ho Chi Minh City. Several new projects were also launched during the period, including expansion works on National Highways 13 and 1, with combined investment of approximately USD1.4 billion.
• Inflation rose to 4.9% y/y in August, driven mainly by higher transportation, housing and food costs. Transportation prices increased 8.0% y/y and account for around 10% of the CPI basket, reflecting higher gasoline and diesel prices following the increase in global oil prices, together with stronger travel demand around the National Day holiday. Housing and construction materials, which account for 18% of the CPI basket, rose 6.6% y/y amid strong construction demand from ongoing infrastructure development and higher electricity prices during the summer months. Food and food services, representing roughly one third of the CPI basket, increased 4.6% y/y, partly reflecting higher dining out prices as restaurants continued to pass higher input costs on to consumers.
• The VND remained strong, appreciating 0.5% against the USD year to date and ranking among the strongest currencies in Southeast Asia. This contrasted with a 4.8% depreciation in the Thai baht and a 6.9% decline in the Indonesian rupiah over the same period. Several factors have supported the currency. First, domestic interest rates have risen by approximately 200 bps year to date, helping maintain the attractiveness of VND assets. Second, FDI inflows have remained strong. Third, tighter enforcement against gold smuggling and informal crypto related foreign exchange transactions appears to have reduced demand for USD outside the banking system. The premium of domestic gold prices over international prices has narrowed from a peak of around 30% to approximately 3%, while the gap between official and parallel market USD rates has largely disappeared. With the trade balance also expected to improve in the coming months, we expect further improvement in Vietnam’s balance of payments and continued support for the VND.

Vietnam’s Stock Market

• The VN-Index rose 6.6% in August, rebounding from July’s decline, with FTSE Russell’s announcement marking the clearest turning point in market sentiment. Average daily trading value remained broadly flat m/m at USD713.7mn, but activity picked up after FTSE announced the list of stocks eligible for the FTSE Global All Cap Index on 21 August. Sentiment strengthened further as Vietnam’s projected weight in the FTSE Emerging All Cap Index was raised to 0.49% from 0.329%. Foreign investors remained net sellers of USD52.3mn, though net selling eased significantly from previous months and turned to net buying following the announcement.
• Gains were broad-based across sectors. Financials rose 5.7%, supported by their strong representation among the newly announced FTSE constituents. Real estate gained 7.9%, driven largely by Vingroup-related stocks, which are expected to receive large passive inflows given their sizeable index weights. Energy and Utilities also performed strongly, rising 8.7% and 13.5%, respectively, supported by the National Assembly’s approval of amendments to the Oil and Gas Law, which should strengthen the legal framework and facilitate project development.
• While first tranche passive inflows are estimated at only $100 to 150mn, we believe the more important impact of the upgrade is improved access to global active capital. Unlike passive flows, active managers typically allocate based on fundamentals and can provide larger and more durable inflows over time. Importantly, the VN-Index excluding Vingroup related companies currently trades at just 10.7x 2026F earnings, a valuation historically associated with periods of severe market stress, despite the underlying earnings outlook remaining broadly intact.
• Looking ahead, we expect several catalysts to support the market:
  • Higher market turnover. Foreign active and passive inflows following the market upgrade should support trading activity and improve overall market sentiment. At the same time, attractive equity valuations could draw additional domestic capital, particularly as alternative investment channels such as real estate, gold and crypto face increasing headwinds. We believe stronger foreign participation could further reinforce confidence among local investors and encourage a higher allocation to the equity market.
  • Further market infrastructure upgrades. This could become the most important catalyst ahead. The State Securities Commission is targeting a Q1 2027 launch of the central counterparty clearing system, which would represent meaningful progress toward MSCI Emerging Market accessibility requirements.
  • Resilient earnings growth. A supportive macro backdrop should continue to underpin corporate earnings. We forecast EPS growth for the top 100 companies excluding Vingroup related names at 19.8% in 2026 and 11.7% in 2027.

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Please download the August 2026 Factsheet for our TIM Vietnam Actively Managed Certificate.

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