As someone who closely tracks emerging markets, I’ve been keeping a keen eye on the Vietnam ETF $VanEck VietnamETF(VNM)$, which tracks the country’s benchmark VN30 Index. This week, VNM broke out of a falling wedge pattern—a technical setup that often signals a reversal from a downtrend to an uptrend. For me, this is more than just a chart pattern; it’s a potential inflection point backed by improving fundamentals and geopolitical tailwinds. Here’s why I believe Vietnam’s stock market deserves a spot on your watchlist, especially if you’re a U.S. stocks investor looking to diversify beyond US equities.
Ho Chi Minh City, the economic capital of Vietnam
Let’s start with the chart. VNM has been in a downtrend since early 2024, forming a falling wedge—a pattern characterized by converging trendlines that slope downward. Falling wedges are typically bullish reversal patterns because they indicate weakening selling pressure as the price consolidates.
VNM Weekly Chart
This week, VNM finally broke above the upper trendline of the wedge, currently decisively above key resistance. For me, this breakout is significant, but I’m not rushing into a trade just yet. I want to see two things:
-
Confirmation of the breakout: The price needs to hold above the wedge’s resistance level (around $12.10) this week.
-
A successful retest: If the price pulls back next week to test the breakout level as support and bounces higher, it would confirm the bullish reversal.
Until then, I’m watching closely. Technicals alone aren’t enough—fundamentals need to align. Fortunately, Vietnam’s economic story is compelling.
Why Vietnam’s Stock Market Could Rally from Here
1. Aggressive Growth Targets and Policy Overhaul
ASEAN-6 economic growth projection.
Vietnam’s parliament just raised its 2025 GDP growth target to at least 8%, up from 6.5–7%, with ambitions for double-digit growth from 2026–2030. This isn’t mere optimism; it’s backed by concrete policies. Last year’s 7.09% growth already outpaced most of Asia, and the government is doubling down with a $174 billion total social investment plan (33.5% of GDP), including a 28% increase in public spending to modernize infrastructure.
Key projects approved this month include:
-
A $8.4 billion high-speed rail linking northern Vietnam to China, targeting completion by 2030.
-
Nuclear power plants and metro expansions in Hanoi and Ho Chi Minh City, aiming to add 752 km of urban rail by 2035.
-
Streamlined bureaucracy: Merging ministries (e.g., Finance with Planning, Information with Science) and cutting 100,000 public sector jobs to boost efficiency.
These initiatives aim to transform Vietnam into a high-income economy by 2045. While ambitious, the focus on infrastructure and administrative reform addresses long-standing bottlenecks.
2. Balancing Inflation and Investment
The push for 8% growth comes with risks. Inflation expectations were raised to 5% for 2025, up from 4.5%, and the fiscal deficit could widen to 4–4.5% of GDP to fund projects. However, the government seems prepared to tolerate short-term pressures for long-term gains.
Prime Minister Pham Minh Chinh
Prime Minister Pham Minh Chinh acknowledged the challenge, noting that even global growth of 3.3% (per OECD) won’t deter Vietnam’s agenda. To mitigate export headwinds—like potential U.S. tariffs under a Trump administration—the plan emphasizes domestic demand, targeting 12% retail sales growth (up from 9% in 2024) and a recovering real estate sector.
3. FDI and Private Sector Catalysts
Vietnam’s ability to attract foreign direct investment (FDI) remains a cornerstone of its growth strategy. In 2024, the country set a record with $25.35 billion in FDI inflows, and the government is now targeting $28 billion for 2025. This ambition is supported by Vietnam’s growing reputation as a reliable alternative to China in global supply chains. Major multinationals like Samsung, $Intel(INTC)$, and Foxconn have already established significant operations in the country, and the trend shows no signs of slowing.
One notable development is the government’s approval of full foreign ownership in satellite internet services, paving the way for companies like SpaceX’s Starlink to enter the market. This move not only enhances Vietnam’s technological infrastructure but also signals its openness to foreign investment in high-tech sectors.
On the private sector front, the State Bank of Vietnam has set a 16% credit growth target for 2025, up from 15% in 2024, to stimulate business activity. This is particularly important for the real estate sector, which is showing signs of recovery after a prolonged downturn. Improved access to credit, coupled with rising consumer confidence, is expected to drive private investment and consumption.
However, challenges remain. The specter of U.S. tariffs under a potential Trump administration could dampen export growth and investor sentiment. Despite this, Vietnam’s strategic location, young workforce, and pro-business reforms make it a compelling destination for global capital. The government’s focus on streamlining regulations and improving infrastructure further strengthens its appeal.
In my view, Vietnam’s FDI and private sector growth are key drivers that could sustain the momentum behind VNM’s breakout. If the country continues to attract investment and foster a business-friendly environment, the stock market could see significant upside in the coming years.
Risks to Consider
Vietnam’s bold moves aren’t without pitfalls. Higher inflation could force monetary tightening, and U.S. protectionism might dent exports. However, the government’s focus on infrastructure and domestic demand diversification provides a buffer.
For investors saturated with U.S. tech stocks, VNM offers exposure to a nation turbocharging its economy through reforms and connectivity. The falling wedge breakout could mark the start of a sustained uptrend if fundamentals hold. I’m eyeing a retest next week. If support holds, a rally toward 15–16 (20–25% upside) seems plausible.
My final thoughts is that Vietnam’s revised growth strategy isn’t just aspirational, it’s actionable. The combination of infrastructure spending, FDI inflows, and bureaucratic efficiency makes VNM’s technical breakout more than a chart pattern. It’s a bet on a nation racing to become Asia’s next economic tiger. Keep this ETF on your radar.
@MillionaireTiger @Tiger_comments @Daily_Discussion @CaptainTiger @TigerSG @TigerEvents
Disclaimer: The views expressed here are my own and should not be taken as financial advice. Always conduct your own due diligence before investing.
Comments