The VN-Index fell 6.7% MoM to 1,735.8 in July, extending its decline into a second consecutive month. The VN-Index dropped 10.3% between end-June and July 22, driven by a combination of domestic and external headwinds, including:
- Renewed geopolitical tensions lifted oil prices but increased global risk aversion, weighing on broader equity markets- P-Lab, PNJ’s affiliated company, came under investigation for alleged diamond smuggling, triggering broader margin calls and weighing on market sentiment.
- Pre-announcement uncertainty surrounding the 12.5% Section 301 tariff, which replaced the temporary 10% tariff under Section 122.
- Weakness across major global equity markets, including the KOSPI (-19.9%), Nikkei 225 (-5.6%), and Nasdaq (-2.0%), further dampened risk appetite.
However, the correction was followed by a meaningful rebound (+4.0% between July 22 and July 31). Valuation-driven bargain hunting emerged after the VN-Index's trailing P/E (excluding Vingroup-related companies) fell to 10.5x on July 20, approaching levels last seen during COVID-19 (10.3x), the Van Thinh Phat crisis (9.5x), and the US tariff shock on April 2, 2025 (10.9x).
Despite July’s correction, the VN-Index has declined only 2.7% YTD, outperforming Indonesia’s JCI (-27.9%) but underperforming Thailand’s SET (+28.9%) and the Philippines' PCOMP (+3.0%).
All sectors declined during July. Industrials (-12.0%) recorded the weakest performance, mainly due to the underperformance of GEE (-28%), GEX (-28%), GEL (-19%), and VCG (-16%). The financial services sector (-9.7%) ranked second, mainly driven by SSI (-12%), VPX (-11%), and VIX (-23%), while the consumer services sector (-9.2%) ranked third, mainly due to VPL (-11%), MWG (-9%), VJC (-10%), and HVN (-9%).
Market liquidity weakened further, with average daily trading value (ADTV) falling to USD676mn (-3.7% MoM) on the HSX and USD736mn (-3.2%) across all three exchanges, both marking the lowest levels since February 2025. Nevertheless, ADTV across the three exchanges remained 13% higher YoY in 7M 2026.
Foreign investors extended their net-selling streak to seven consecutive months, with net selling of USD441mn on the HSX and USD453mn across the three exchanges in July. Top foreign net sells included VHM (-USD151.3mn), TCB ( USD51.1mn), and PNJ (-USD39.1mn). In contrast, the top foreign net buys were VNM (+USD53.1mn), MCH (+USD18.2mn), and VND (+USD12.7mn). In 7M 2026, foreign net sells reached USD3.5bn on the HSX. They also net sold USD4.2bn on Indonesia’s JCI and USD178mn on the Philippines’ PCOMP while they net bought USD2.3bn on Thailand’s SET.
Earnings results: The H1 earnings season has largely concluded, with aggregate reported NPAT-MI for 84 stocks under our coverage rising 57.0% YoY, reaching 57.2% of our FY2026 forecast, pointing to another solid earnings season.
Outlook: While macro conditions and corporate earnings remain supportive, a sustained market recovery will likely require stronger trading liquidity, moderating foreign selling, and greater clarity on US trade policy and the Middle East conflict. At end-July, the VNI’s ttm P/E was 13.1x vs the Philippines’ PCOMP at 9.5x, Indonesia’s JCI at 14.9x, and Thailand’s SET at 17.1x.
