As Vietnam continues to thrive among Asia’s top destinations for foreign investment, we are committed to keeping our global audience informed about key developments through the Kenno Vietnam Pulse series.

In November, Vietnam finalized its economic targets for 2026, made progress toward the stock market upgrade, and initiated one of its largest domestic investment plans in years. These developments gave investors more visibility into the country's medium-term growth trajectory, lifting market confidence after a volatile October. Although retail activity was temporarily disrupted by recent flooding in parts of the country, we expect a steady recovery in domestic demand and sustained economic growth heading into next year.

Stock Market Movement

In a new update on its plan to officially upgrade Vietnam to a Secondary Emerging Market, FTSE Russell published a preliminary list of 28 local companies that could be included in its global indices by September 2026. This indication has helped investors and index-tracking funds better quantify future passive inflows and assess which Vietnamese companies may benefit most from this inclusion.

FTSE's announcement also lifted confidence, especially after several weeks of margin-related selling and broad weakness across global markets. The VN-Index gained 3.1% in November, with market recovery led by large-cap names such as Vingroup-related stocks and VietJet Air. Foreign net selling continued but at a much slower pace compared to the previous three months. We also attribute improvements in sentiment and liquidity to the government's ambitious 2026 target, which was finalized at 10% GDP growth.

From an investment perspective, the market upgrade roadmap remains one of Vietnam’s most meaningful structural catalysts. The early visibility provided by FTSE’s list is positive for companies with strong governance, earnings visibility, and high liquidity. For our portfolio, we expect increasing foreign participation to support several holdings that have met or are progressing toward meeting these criteria.

Macroeconomic Developments

In November, Vietnam announced nearly 200 projects to be initiated in the remainder of 2025, representing USD 40 billion in public investment. The plan covers transport infrastructure, industrial facilities, civil works, technical-infrastructure upgrades, and social-housing developments. Notably, this pipeline of projects will be 100% domestically funded, reflecting the country's expanding fiscal capacity and a growth strategy focused on domestic strengths.

Alongside targeted public spending, Vietnam's steady economic momentum was also supported by strong industrial growth across manufacturing, exports, and power generation. Inflation remained controlled, but household spending declined due to recent flooding in some regions. However, we consider this downturn short-lived, with limited impact on the broader economy and aggregate demand in the long run.

As conditions normalize from flooding disruptions, Vietnam is heading into 2026 with a solid economic setup, especially for domestic consumption growth. Stronger public investment, stable employment, and rising income should support consumer demand. This will benefit our portfolio companies, especially those in consumer retail and real estate.

Sector Highlights

Recent floods and landslides across Southeast Asia have made global headlines. This month, we highlight the consumer goods sector as it was the most impacted by these events in Vietnam. As mentioned above, severe flooding across northern and central Vietnam disrupted retail activity across both staples and discretionary categories.

Companies reported temporary distribution challenges, slower foot traffic, and dips in sales during this period. These resulted from logistics constraints and consumers redirecting spending toward immediate needs in provinces that suffered heavy flood damage. The impact was especially visible for retailers of non-essential goods, such as electronics and household appliances.

Despite the near-term setback, we expect these consumer sectors to rebound within a few months. The government has shifted its immediate focus to stabilizing conditions in the affected regions and has initiated efforts to strengthen preparedness and prevention measures for natural disasters. While central Vietnam is typically the most affected region by extreme weather each year, the fact that it contributes only a limited share to national GDP is also why we anticipate minimal impacts on aggregate demand and economic growth, particularly in the long run.

The Month at Kenno

In November, we increased our exposure to companies that stand to benefit most from the current macro backdrop. We raised our position at Masan Group (MSN) after its share price reached an attractive valuation point, relative to long-term expected earnings growth. We also participated in Nam Long Group (NLG)'s rights issuance, reaffirming our constructive view on growing demand for residential property and on the company’s presales trajectory for its upcoming township projects.

These companies have maintained strong earnings, demonstrated disciplined governance, continued to share our conviction in Vietnam's domestic consumption outlook. Given the country's rising focus on developing its private economy and middle class, we believe its consumer market is well positioned to benefit in 2026. At the same time, the stock market upgrade planned for next year is expected to boost foreign access and trigger fresh capital inflows. These conditions should create unique opportunities for high-quality firms to expand their businesses, accelerate earnings, and raise shareholder value.

In our view, the next several months remain an attractive entry point for prospective investors seeking exposure in Vietnam, as the strong 2025 rally was mainly led by banks, brokerages, and Vingroup-related companies. Meanwhile, the expected benefits large-scale public investment and rising household income have not yet been priced into domestic consumption names, leaving meaningful upside potential for our portfolio.

Stay in the know!

And that’s a wrap for this month’s edition of Kenno Vietnam Pulse. We hope you enjoyed reading and found valuable insights into Vietnam’s market landscape. Feel free to subscribe to our monthly newsletter more timely, factual, and actionable updates. If you would like closer look at investment opportunities in Vietnam, we invite you connect with us for more information and tailored advice.