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Vietnam Q4 2026 Outlook: A Mispricing That Won’t Last
Vietnam’s economic fundamentals remain strong. GDP expanded 9.0% y/y in 9M/2026, supported by robust manufacturing, construction and trade activity, alongside resilient domestic consumption and tourism. Notably, Vietnam received its first investment-grade sovereign rating from Japan’s R&I credit rating agency, marking an important milestone in its reform journey.
Yet the stock market has failed to reflect these strong fundamentals. Despite strong economic momentum and 34% net profit growth among the top 100 listed companies (excluding Vingroup-related firms) in H1/2026, the VN-Index gained just 2.1% in 9M/2026, with performance largely concentrated in Vingroup-related stocks. Elevated deposit rates and prolonged global geopolitical uncertainty continued to weigh on broader market sentiment.
Looking ahead, we remain constructive on both Vietnam’s economic and equity market outlook:
- Sustained economic growth: We forecast GDP growth of 8.8% in 2026 and 8.0% in 2027, supported by stronger public investment, improving project execution, resilient manufacturing and domestic consumption. Inflation is expected to moderate from 4.7% in 2026 to 3.7% in 2027, while strong foreign currency inflows should support VND stability.
- Attractive earnings growth and valuations: Excluding Vingroup-related firms, the top 100 listed companies are projected to deliver EPS growth of 20.4% in 2026 and 12.0% in 2027. Despite this favorable earnings outlook, the VN-Index continues to trade at a significant discount to regional emerging market peers.
Vietnam offers a compelling investment opportunity at a pivotal moment in its market development.
- Vietnam provides differentiated exposure to more traditional growth drivers, including infrastructure investment, manufacturing expansion and domestic consumption, while growth in many developed markets is increasingly concentrated in the AI and technology cycle. These drivers offer global investors diversification benefits at attractive valuations.
- The catalysts for a market re-rating are also gathering pace. Vietnam’s inclusion in the FTSE Emerging Markets Index, with potential inclusion on the MSCI Emerging Markets watchlist in 2027, could attract not only passive index-tracking inflows but also greater interest from active global fund managers. At the same time, Vietnam’s improving sovereign credit profile – with Fitch and S&P ratings just one notch below investment grade and a recent upgrade by Japan’s R&I to investment-grade status – adds to the potential for deeper integration into global capital markets.
- We see particular potential in fundamentally strong, attractively valued companies beyond the headline index constituents, that remain underowned by foreign investors, before broader investor recognition drives a market re-rating.
To make it easy to follow, we’ve prepared a brief recap of the key takeaways in an Avatar video:
