Daily Market Watch 03/07/2025: Vietnam Strikes Trade Deal with U.S., Market Reaction Is Mixed

THE EQUITY MARKET

o        Vietnam’s equity market delivered a mixed response following President Trump’s announcement of a trade agreement with Vietnam. Under the deal, Vietnamese exports to the U.S. will be subject to a 20% tariff, while transshipped goods face a 40% levy. In return, the U.S. gains zero-tariff access to the Vietnamese market. Retail sentiment was initially buoyed by the fact that Vietnam is among the first countries to formalize a trade pact with the U.S. However, optimism was tempered as the announced tariffs, though lower than the previously threatened 46%, still exceeded the market’s expected rate of around 15%.

o        The VN-Index fluctuated within a narrow range before closing down 0.19%, reflecting the market’s indecision. Liquidity surged to USD 1.26 bn in trading value—one of the highest levels seen recently—as both buying and selling activity intensified. Bullish investors viewed the trade deal as a positive development for Vietnam, while bearish one saw the 20% tariff as higher than anticipated and used the opportunity to lock in gains.

o        Foreign investors reacted positively to the  tariff news and  returned as decisive buyers, contributing a substantial USD 86.9 mn in net inflows. Their buying was concentrated in large, liquid names such as SSI (+USD 16.6 mn), MWG (+USD 11.3 mn), and CTG (+USD 5.6 mn), reflecting sectoral rotation into brokerage, retail, and banking. On the sell side, activity remained subdued, with modest outflows recorded in DHC (-USD 1.3 mn), HDC (-USD 1.1 mn), and GVR (-USD 1.1 mn)