Vietnam-US trade agreement: New expectations for foreign capital flows

(Chinhphu.vn) - The preliminary tax agreement between Vietnam and the United States helps reduce policy risks, opening up recovery expectations for the stock market. SSI's chief economist said that stocks with internal growth and large capitalization will benefit in the long term.

The preliminary agreement on tax between Vietnam and the US helps reduce policy risks, opening up recovery expectations for the stock market. SSI chief economist commented that stocks with internal growth and large capitalization will benefit in the long term.

Giving a boost to market sentiment

Following a phone call between General Secretary To Lam and President Donald Trump on July 2, Vietnam and the United States reached an initial consensus on a tariff agreement. This step was considered by the analysis community to be an important positive signal in minimizing trade and policy risks, while expanding the room to attract long-term investment flows into the financial market.

Mr. Pham Luu Hung - Chief Economist, Director of the Center for Analysis and Investment Consulting, SSI Securities Company said: The tariff agreement with the US is "a very positive signal". Although the tax rates have not been fully agreed upon, expected to only be around the 20% mark, Mr. Pham Luu Hung commented that this is "not a worrying number".

However, Mr. Pham Luu Hung also noted that this is only a preliminary agreement, not a final commitment. The July 9 deadline, the deadline to complete all negotiations, is an important time. If the terms are not finalized before this date, the 10% tax currently in effect may continue to be extended.

Another key point in the negotiations is the rules of origin criterion.

"Only when businesses can clearly prove their Vietnamese origin can they enjoy real incentives. This is especially important for industries such as textiles, electronics, and wood products, which are heavily dependent on imported materials from China," said Mr. Pham Luu Hung.

Mr. Pham Luu Hung - Chief Economist, Director of Investment Analysis and Consulting Center, SSI Securities Company

Domestic, large-cap stocks benefit long-term from ETF and FDI cash flows

With the cooling of policy uncertainty, Mr. Pham Luu Hung believes that the market will react positively and gradually shift its mentality from defensive to proactive.

Investors will return to focus on internal growth factors, especially stock groups with good fundamentals, high liquidity and the ability to maintain a stable free-float ratio.

SSI Research experts assess that if the possibility of upgrading the market from frontier to emerging is realized, especially in the FTSE Russell review in October, ETF cash flow will increase into Vietnam. Mr. Pham Luu Hung said that "the probability of being upgraded by FTSE could be up to 90%".

With that scenario, about 20-30 stocks will be added to the index baskets, in which large-cap stocks such as Vinamilk, Hoa Phat ... are assessed to benefit greatly from the increase in net buying by foreign investors.

In addition, the group of securities stocks is also being evaluated as the focus in the context of strong increase in market liquidity.

SSI Research also maintains its forecast that after-tax profits of non-financial stocks, mid-cap and large-cap, will increase by about 13% in 2025 – equivalent to the VN-Index moving around the 1,400-point mark. However, Mr. Pham Luu Hung emphasized that investors should focus on businesses with solid internal foundations instead of chasing speculative stocks based on short-term news.

Along with the trade agreement, the expectation that the US will recognize Vietnam as a market economy is bringing another positive wind to investors. According to SSI experts, if recognized, Vietnam will significantly reduce the risk of being subject to trade defense measures, especially anti-dumping lawsuits that often occur in the steel, textile and seafood industries.

In addition, public investment policies for the 2026–2030 period will also create additional momentum for domestic growth. Sectors such as infrastructure, financial services and consumption are expected to be the leading sectors thanks to commitments to improve the investment environment and accelerate disbursement.

Mr. Pham Luu Hung also commented that the bigger story is not the tax rate, but that Vietnam has controlled policy risks well and established long-term confidence in foreign capital flows. This will open a cycle of re-pricing for groups of stocks with sustainable financial foundations and associated with internal growth.

According to Maybank Research, the 20% tax rate is significant, but still within the control of most export enterprises, especially industries with high localization rates.

specific, the agricultural sector has a localization rate of about 65%, electronics 50% and textiles 45%. Many businesses have proactively prepared by renegotiating with US partners, sharing costs, adjusting selling prices, and even shifting export markets to reduce dependence on the US.

In terms of attracting investment, the tax gap compared to regional competitors is only 5-10%. For China, the gap has temporarily expanded to 35%, making Vietnam more attractive to foreign investors.

The Vietnamese stock market in the morning session of July 3 recorded a tug-of-war around the peak, showing investors' cautious sentiment despite good news from trade negotiations.

Market liquidity improved, exceeding VND4,000 billion just a few minutes after the opening session, showing signs of improving cash flow. However, the buying trend is still selective, especially in the context of foreign investors maintaining net selling.

While US stocks surged with the S&P 500 and Nasdaq hitting new highs, thanks to expectations for the Vietnamese supply chain, which produces 50% of Nike's shoes and 30% of its apparel, Asian markets were in the red. The Hang Seng, Nikkei, and Shanghai Composite all fell slightly due to cautious sentiment about the US's new tax policy towards its trading partners.

Mr. Minh

Source: https://baochinhphu.vn/thoa-thuan-thuong-mai-viet-nam-hoa-ky-them-ky-vong-moi-cho-dong-von-ngoai-102250703163537863.htm