VIC, VHM Drive VN-Index Surge as SBV Pushes Rate Cuts

Overview

VIC and VHM led a broad rally on October 21, with the VN-Index surging 46.7 points (2.76%) to 1,738.67, its strongest one-day gain since April 8. The move came as the State Bank of Vietnam (SBV) pressed 46 commercial banks to lower deposit rates by at least 0.5 percentage points and lending rates by 1.5-2 percentage points, adding a policy tailwind to real estate and securities stocks.

Key Facts

• VN-Index closed at 1,738.67 on October 21, up 46.7 points or 2.76%, the biggest daily gain since April 8.
• VIC rose 6.99% and VHM rose 6.92%, together contributing nearly 30 points, or about 64% of the index gain.
• HOSE matching-order liquidity reached nearly VND 18,000 billion, up almost 60% from the prior session.
• The SBV met with representatives of 46 commercial banks on October 19, requiring a minimum 0.5 percentage point cut in listed deposit rates for terms of six months or more.
• Banks were also asked to reduce lending rates by 1.5-2 percentage points for manufacturing, business, and priority sectors.
• By the morning of October 20, 15 banks had announced deposit rate cuts.
• Real estate stocks DXS and NLG and tickers GEE and VSC rose near their daily limits; securities firms VIX, SSI, and VND also gained.

What Happened

After a slow start, demand surged into large-cap stocks and spread across sectors, lifting the VN-Index to its strongest close in more than half a year. The 2.76% gain placed Vietnam among Asia’s top-performing markets on October 21, behind only South Korea. Liquidity on the HOSE exchange improved nearly 60% to almost VND 18,000 billion, signaling a shift in investor sentiment after a period of range-bound trading.

The Vingroup complex provided the main thrust, with VIC and VHM each rising nearly 7% and together accounting for roughly 64% of the index’s advance. The rally was not confined to blue chips: real estate names DXS and NLG and stocks GEE and VSC rose near their ceiling limits, while brokerage shares VIX, SSI, and VND also advanced. The SBV’s October 19 meeting with 46 banks, at which it mandated minimum cuts to deposit and lending rates, was cited as a supporting factor. Đỗ Bảo Ngọc, Deputy General Director of Chứng khoán Kiến Thiết Việt Nam (CSI), said the move may mark a peak in interest rates after a prolonged rise, though he cautioned that a single round of cuts is not enough to shift funds from deposits into equities.

Market Context

VIC, listed on HOSE, closed at VND 223,600 on October 21, while VHM closed at VND 61,800. The two Vingroup names had been under pressure amid elevated funding costs before the October 21 session. The broader real estate sector has been sensitive to interest rate expectations, and the SBV’s directive reinforced the view that deposit rates may have peaked. Securities stocks VIX, SSI, and VND typically react to liquidity and rate expectations, and their gains on October 21 reflected improved risk appetite. The VN-Index’s 2.76% advance was its largest since April 8, and the near-60% jump in HOSE turnover suggests the move was backed by genuine participation rather than a thin, headline-driven spike.

Strategic Significance

For long-term investors, the October 21 rally highlights the outsized index weight and sensitivity of the Vingroup complex to policy signals. VIC and VHM alone accounted for nearly two-thirds of the index gain, meaning the market’s direction is heavily tied to a handful of large-cap real estate names. The SBV’s push to lower lending rates by 1.5-2 percentage points for priority sectors, if sustained, would reduce funding costs for developers and support earnings recovery. However, the policy is a directive rather than a guarantee, and its transmission to corporate borrowing costs depends on bank implementation. The key strategic question is whether the rate cut marks a durable turning point or a one-off adjustment; CSI’s Ngọc noted that only a medium-term trend would be enough to shift household savings toward equities.

What to Watch

• Follow-up announcements from the remaining 31 banks on deposit rate cuts and the timeline for lending rate reductions.
• HOSE liquidity levels in the coming sessions to confirm whether the October 21 volume surge is sustained.
• Third-quarter earnings releases from VIC, VHM, and other real estate developers, which will show whether lower funding costs are feeding through.
• SBV policy statements or meeting minutes clarifying whether further rate cuts are planned.
• Foreign-ownership filings and block trades in VIC and VHM, given their index weight and sensitivity to foreign flows.