Vietnam February 2026 Outlook – Strong PMI, Rising FDI, and VN-Index Momentum

We would like to present you our monthly Macroeconomic & Stock Market Highlights for Vietnam alongside with the monthly performance update of the TIM Vietnam Actively Managed Certificate for February 2026.

Watch our video recap of key takeaways of the Vietnam Marcroeconomic and Stock market in February 2026

Vietnam’s Economy

Please recall that Vietnam had a long public holiday for Lunar New Year in February 2026. Hence, the combined Jan-Feb numbers will be used for year-over-year comparison.

• U.S. tariffs on Vietnamese imports have declined to an effective rate of 18.8% following a recent policy shift. After the U.S. Supreme Court invalidated the Trump administration’s global tariff measures, the administration introduced a new 15% tariff under Section 122 of the Trade Act. Despite the surcharge, the overall effective duty on Vietnamese goods is now lower than the previous 21.6% level. During the month, General Secretary To Lam met with President Trump, with both sides agreeing to intensify trade negotiations. On the sidelines of the visit, Sun Phu Quoc Airways signed an agreement with Boeing for 40 aircrafts. President Trump also indicated that he would direct relevant agencies to consider removing Vietnam from the list of countries facing restrictions on access to advanced U.S. technologies.
• Vietnam’s February PMI rose to 54.3 from 52.5 in the previous month, marking the highest level in four months. The increase indicates a solid improvement in business conditions, supported by stronger growth in both production and new orders amid improving customer demand. Rising order volumes and higher production requirements also led to expansions in employment and purchasing activity. These developments are reflected in trade data, with exports and imports increasing by 18.3% and 26.6%, respectively. Overall, Vietnam recorded a trade deficit of nearly $3 billion, which we expect to return to a surplus in the coming months.
• Retail sales growth softened to 7.9% y/y. International tourism remained robust, with arrivals reaching 4.7 million, up 18.1% y/y. Meanwhile, domestic consumers appear more cautious compared with previous Tet periods, with consumers are increasingly prioritizing essential purchases while cutting back on discretionary spending. Meanwhile, the labor market started the year on a positive note. The Ministry of Home Affairs estimates that around 300,000 new jobs will be created in Q1/2026, with average worker salaries expected to increase by about 4%.
• FDI disbursements reached $3.2 billion, up 8.8% y/y, with 82.7% directed to manufacturing. Recent developments include a $2.3 billion LNG project in Nghe An led by an SK Innovation-led consortium and the opening of a new Fujiya confectionery factory in Tay Ninh. Public investment increased by 11.5% y/y, with disbursement from the Ministry of Construction serving as the main contributor. Construction activities across several infrastructure projects continued throughout the holiday period. Major projects expected to be completed in early 2026 include the $1.0 billion Can Tho – Ca Mau expressway and the $1.1 billion Ben Luc – Long Thanh expressway.
• Inflation rose to 3.4%, mainly driven by higher food and housing-related costs. Food and foodstuff prices increased by 5.3% as consumer spending typically rises during Tet, while stronger demand for home renovation lifted housing and construction material costs. These pressures were partly offset by 3.2% easing in transportation costs.
• However, the Iran conflict may lead to higher transportation costs and inflationary pressures. Vietnam’s direct exports to the Middle East remain limited, accounting for around 2% of total exports. However, rising freight costs and longer delivery times could affect exporters and manufacturing activities. Higher oil prices may also add inflationary pressure, as reflected in the recent 10% increase in retail gasoline prices announced on 5th March. Vietnam operates two oil refineries, Binh Son Refinery (BSR) and Nghi Son Refinery (NSR), which together supply nearly 80% of domestic gasoline demand. BSR mainly processes crude oil sourced from domestic fields, limiting its direct exposure to Middle East disruptions. Meanwhile, NSR has secured sufficient crude supply to maintain operations through the end of March 2026, supported by existing inventories and shipments already in transit. Given the uncertainty surrounding the conflict, we will continue to monitor developments and assess their potential impact on Vietnam’s economy.

Vietnam’s Stock Market

• The VN-Index extended its upward momentum in February, rising 2.4%. The index declined by 4% in the first week as investors trimmed leverage ahead of the long Tet holiday, before rebounding afterward. However, gains were relatively concentrated in a few sectors rather than broad-based. Average daily trading value in the first two months of 2026 reached approximately USD1.3 billion, more than doubling year-on-year. Foreign investors recorded net outflows of USD301 million during the month, including a $81.8 million divestment of Jardine Cycle & Carriage from Vinamilk (VNM), resulting in a net foreign selling value of USD81.8 million in VNM.
• Sector performance was led by Real Estate, driven mainly by gains in Vingroup (VIC), while most other property stocks declined. VIC was supported by media reports of a planned IPO for its ride-hailing subsidiary GSM on the Hong Kong Stock Exchange in 2027, targeting a valuation of USD20bn. We view this valuation as ambitious and remain cautious given the group’s elevated leverage; the stock is currently trading at 8.8x 2026F P/B. Meanwhile, other residential developers faced selling pressure as rising mortgage rates heightened concerns over softer demand for their projects.
• The Energy and Materials sectors also performed well during the month. In the Energy sector, Binh Son Refining & Petrochemical (BSR) led the gains, with the stock climbing 39%. The issuance of Resolution 79, reaffirming the “leading role” of the State economy, together with concerns over higher oil prices amid U.S.–Iran tensions, supported capital inflows into the stock. With a low free float of only 7.5%, the impact of these inflows was further magnified. In Materials, Hoa Phat Group (HPG) gained 7%, supported by expectations of higher sales volume and improved profit margins, underpinned by firmer domestic steel prices, lower iron ore costs, resilient demand, and higher utilization at its new facility.
• On the other hand, Information Technology lagged. FPT Corporation (FPT) declined 11% amid AI development concern, which we deem as an overreaction as explained earlier. At the current price, FPT appears reasonable relative to its earnings outlook, trading at 15.1x 2026F P/E.
• FTSE Russell is scheduled to hold two committee meetings in March as part of its interim country classification review, with the outcome to be announced on 7 April. As a reminder, Vietnam was provisionally upgraded to Secondary Emerging Market status in September last year, subject to a follow-up assessment in March 2026, after FTSE Russell received market feedback regarding limited access to global brokers for trading in Vietnam. In early 2026, the Ministry of Finance issued Circular No. 08/2026, permitting foreign institutional investors to route orders to local brokers via global brokers without the need to open a direct trading account domestically. Hence, the probability of Vietnam passing the upcoming review is highly likely.
• Looking ahead, heightened geopolitical uncertainty and a retail-dominated investor base (over 80% participation) suggest that market volatility to be higher. However, direct exposure of listed companies to the Middle East is limited, with the main impact likely transmitted through higher input and logistics costs. The VN-Index is trading at a forward P/E of around 14.7, with 14.0% earnings growth for the top 100 companies, indicating valuations are supported by fundamentals. Importantly, ongoing progress toward a potential Emerging Market upgrade may provide additional support to sentiment.

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Please download the February 2026 Factsheet for our TIM Vietnam Actively Managed Certificate.

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