Vietnam's stock market experienced a strong breakout in May, buoyed by positive signals from Vietnam-US trade negotiations, interest from Donald Trump’s business group, a surge in Vingroup-related stocks, and the launch of the KRX trading system.

After gaining 3.3% in the previous week, the VN-Index added another 1.4% during the week of May 19-23, closing at 1,314.5 points. A series of favorable developments propelled the $200 billion Ho Chi Minh Stock Exchange (HoSE), overcoming the seasonal concern of "Sell in May." Still, risks remain ahead.

Signals from the US and a bold move by billionaire Pham Nhat Vuong

After dropping back to the support zone of 1,290-1,300 points on Monday, the VN-Index rebounded strongly midweek.

According to Dinh Quang Hinh, Head of Market Strategy at VnDirect Securities, the rebound was driven by positive progress in trade negotiations between Vietnam and the United States.

Following the second round of talks, both countries made notable progress, identifying agreed-upon areas and issues requiring further discussion. A third round of negotiations is scheduled for early June to continue working toward a mutually beneficial agreement.

Simultaneously, The Trump Organization officially launched a $1.5 billion project in Hung Yen province. These developments have fueled expectations that Vietnam could secure a more favorable reciprocal tariff deal within the next 45 days.

Adding to the momentum was a sharp rise in Vingroup-related stocks following several positive updates, such as Prime Minister Pham Minh Chinh directing agencies to study the proposal for a high-speed railway project by Vinspeed, and the groundbreaking of the Tu Lien Bridge, which will improve connectivity between the Vin Global Gate Co Loa project and the city center. Vingroup companies also unveiled new investment plans.

Earlier, Vinpearl JSC (VPL) debuted on HoSE on May 13, with its stock hitting the daily ceiling limit for three consecutive sessions, including a 20% surge on its listing day. It now trades at approximately VND 100,000 per share, giving it a market cap of over VND 176.6 trillion (around USD 6.8 billion), placing it among the top 7 companies on HoSE.

The uptrend cooled in the final two sessions of the week due to profit-taking pressure near the resistance range of 1,320-1,340 points. The VN-Index still finished the week up 1.4% at 1,314.5 points.

Outlook for May 26-30 and 2025 projections

Vietnam’s stock market recorded another week of positive gains but may face profit-taking pressure in the upcoming week of May 26-30 as the VN-Index approaches a major resistance zone.

Dinh Quang Hinh noted that the 1,320-1,340 point range remains a key challenge, representing the year's peak. The market is entering an “information vacuum” following Q1 earnings reports and annual shareholder meetings for 2025.

With the next round of Vietnam-US trade talks set for early June, the VN-Index may consolidate within the 1,290-1,340 range, absorbing selling pressure and awaiting fresh catalysts.

Following a significant rally, short-term investors have become more cautious, avoiding stocks that have surged and slowing down the market’s liquidity rotation.

In the final trading session on May 23, although the market closed in positive territory, gains were modest. Liquidity declined sharply, with trading volume dropping nearly 43% from the previous session and 19.2% below the 20-session average.

According to CSI Securities, the narrow gains on low liquidity suggest limited momentum for further upside. As the VN-Index sits near its 2025 high, a breakout seems unlikely, and rising profit-taking pressure is expected.

CSI projects that the index may need more time to consolidate or correct to a balanced level to gather momentum for the next rally.

On the weekly chart, the VN-Index has maintained an upward trend with three consecutive weeks of gains. However, investors are awaiting a strong breakout above the 2025 high of 1,343 points with explosive liquidity surpassing the 20-session average before resuming buying activity.

Should the index correct, the 1,250-point level is seen as a strong support and a safe entry point for new buying.

Looking to the mid- and long-term, VnDirect experts are optimistic that breakthrough policies to promote the private sector under Resolutions 68 and 198 will drive comprehensive reforms and significantly improve Vietnam’s business environment. These changes are expected to be key drivers of the stock market in the coming years.

Manh Ha