MBS Sees 80% Chance of August Rally, VN-Index Target 1,800

Overview

MBS Securities forecasts an 80% probability that the VN-Index will rise in August, targeting 1,800 points in its base case and 1,850 in a positive scenario. The forecast is based on seasonal strength, attractive valuations, and the return of foreign inflows, with state capital restructuring stocks expected to lead the rally. Key tickers mentioned include GAS, MBB, CTG, and GVR.

Key Facts

• MBS estimates an 80% probability of a market increase in August, based on seasonal factors; in the past six years, August has always been positive, with an average gain of 3.9%.
• The VN-Index closed at 1,768.06 points last week, up 32.28 points (+1.86%).
• Top contributors to the weekly gain: GAS (+3.1 points), MBB (+2.8 points), CTG (+2.8 points), GVR (+1.9 points).
• The VN30 index rose 2.1% for the week; Midcap and Smallcap gained 2.4% and 1.6%, respectively.
• Market breadth improved for the second consecutive week, with 87.5% of stock groups advancing, the strongest since mid-January 2026.
• The market’s forward P/E is 12.4 times, in line with the five-year average.
• Foreign investors recorded their first net buying week after a record selling streak, with buying concentrated in blue-chip stocks, suggesting the return of P-notes flows.

What Happened

MBS Securities released its weekly report forecasting a positive August for the Vietnamese stock market. The report highlights that after a nearly 7% decline in July, the market is poised for a strong recovery. MBS points to seasonal factors, noting that August has historically been the strongest month, with an average gain of 3.9% over the past six years.

The report also emphasizes the return of foreign capital, which recorded its first net buying week after a prolonged selling streak. MBS interprets the buying pattern—concentrated in blue-chip stocks—as a sign of P-notes flows returning, while ETF flows remain limited. Additionally, the market’s forward P/E of 12.4 times is considered attractive, potentially stimulating further inflows. MBS expects the market to be driven by stocks related to state capital restructuring, as per Decision No. 40/2026/QD-TTg, alongside sectors like securities, retail, and logistics.

Market Context

Last week, the VN-Index rose 1.86% to 1,768.06 points, with strong contributions from large caps such as GAS (HOSE), MBB (HOSE), CTG (HOSE), and GVR (HOSE). The VN30 index gained 2.1%, while mid and small caps also advanced. Market breadth improved significantly, with 87.5% of stock groups rising. The positive sentiment is supported by improving macro conditions and the return of foreign inflows, which had been net sellers for a record period. The market’s valuation at 12.4 times forward P/E is in line with the five-year average, suggesting room for further upside.

Strategic Significance

For long-term investors, the MBS forecast underscores the potential for a sustained rally driven by structural reforms, particularly the state capital restructuring initiative under Decision No. 40/2026/QD-TTg. This policy could unlock value in state-owned enterprises, creating new leadership stocks. The return of foreign capital, especially via P-notes, signals renewed international interest, which could support liquidity and valuations. The market’s attractive valuation, combined with seasonal strength, provides a favorable backdrop for equity investment in August.

What to Watch

• FTSE’s announcement of its stock portfolio at the end of August, which could influence foreign flows.
• The pace and scale of foreign net buying, particularly whether P-notes flows continue.
• Implementation details of Decision No. 40/2026/QD-TTg and its impact on state-owned enterprise stocks.
• Weekly market breadth and volume to confirm the sustainability of the rally.
• Any macroeconomic data releases that could affect investor sentiment, such as inflation or PMI figures.