Daily Market Watch 27/06/2025: VN-Index Hits 3-Year High on Policy Boost and Improved Sentiment

THE EQUITY MARKET

o        Vietnam's equity market traded within a narrow range in the morning as retail investors remained cautious, awaiting clearer market signals. However, sentiment turned positive in the afternoon, supported by upbeat trading across regional markets. The passage of the revised Law on Credit Institutions also lifted investor confidence, particularly benefiting banking stocks. As a result, the VN-Index advanced 0.42% by the session’s close, closed at 1371.44 pts—marking a three-year high The National Assembly passed the revised law on credit institutions which bolster the central bank’s authority to ensure the safety of the banking system while offering legal clarity for commercial banks to resolve non-performing loans. Under the legislation, which takes effect from Oct. 15, the State Bank of Vietnam is authorized to provide special unsecured loans with zero lending rates to troubled banks - a power previously held by the Prime Minister.  We believe that this move is quite essential in order to deal with bad banks. It enables faster and stronger responses in crisis cases that could lead to systematically damages. SBV, as a last resort lender, could quickly support critical weak banks out of iliquidity turmoil and maintain financial system. It may also accelerate the restructuring of trouble banks and improve resolution outcomes.

o        The new regulation also enables commercial banks to seize collateral assets of bad debts with prior agreement from borrowers. This is a long awaited decision as it eliminates the need for prolonged legal procedures when banks deal with bad debts. Banks are now empowered to proactively liquidate collateral assets to recover outstanding loans in the event of borrower default, provided prior contractual agreements are in place. This helps to (1) enhance bad debt recovery efficiency, especially for real estate and other secured assets. (2) supports faster cleanup of bank balance sheets, helping improve asset quality and transparency. (3) in return, it reinforces borrowers' credit discipline. This is a step toward aligning Vietnam’s legal and banking frameworks with international standards.

o        Total market liquidity remained stable at USD 729 million. Trading activity has been somewhat muted in recent sessions due to prevailing investor caution. Foreign investors were more active, recording a net sell of USD 2.4 million. Notable net outflows included FPT (-USD 6.0 million), VCI (-USD 2.6 million), and STB (-USD 2.4 million), while net inflows targeted MSN (+USD 4.9 million), VHM (+USD 2.8 million), and MWG (+USD 2.4 million).