According to its October strategy report, the analysis department of VNDirect Securities stated that the market's overall price-to-earnings (P/E) ratio is currently 12.05 times. This figure is lower than the 12.46 times recorded in September.

Calculations by Rong Viet Securities (VDSC) estimate the market P/E at approximately 12 times. This level is attractive and below the 5-year average of 13.9 times.

Excluding Vingroup stocks (including VIC, VHM, VRE, and VPL), the VN-Index's P/E over the last 12 months drops to about 10.07 times. Data also indicates that Vietnam's stock valuation is lower than many countries globally, such as the US, India, Japan, and Trung Quoc.

"This valuation range is low historically and relatively good when considering the earnings growth outlook for listed companies," stated VNDirect's analysis team.

VN-Index P/E valuation based on VNDirect data. Graphics: Trong Hieu (with AI support)

VNDirect noted that the current P/E for most sectors, including real estate, retail, and banking, is below their 10-year median levels. This provides a basis for investors to select companies with strong fundamentals and positive growth prospects.

However, an attractive market valuation is only a necessary condition to attract long-term capital; it is unlikely to create a valuation rally on its own. To activate bottom-fishing and improve investor risk appetite, VNDirect's analysis team believes the market needs clearer macroeconomic catalysts.

Cooling oil prices will help reduce inflationary pressure, while banking system liquidity is expected to continue improving, helping interest rates remain stable or decrease further.

Assuming the VN-Index remains around its current level, VNDirect forecasts the P/E valuation for the second half of the year to be approximately 11.5 times, significantly lower than historical averages.

Despite the attractive valuation, this securities company predicts that about 70% of the market will trade sideways and consolidate in October, fluctuating within a range of 1,720-1,780 points. The "support" for the VN-Index stems from the positive earnings outlook for businesses, which is expected to continue in the last two quarters of the year.

Stock trading at Kafi exchange, 4/2026. Photo: Quynh Tran

In this regard, VDSC's analysis team estimates that total Q3 after-tax profits could increase by nearly 20% year-on-year, with more than one-half of sectors projected to rise. Similar to other analytical units, VDSC considers the banking, steel, and retail sectors' business results to be key market drivers.

Vietnam's Q3 GDP growth of 9.95% also serves as a macroeconomic driver supporting the market. In the manufacturing sector, the September purchasing managers' index (PMI) remained above 50, indicating continued expansion of manufacturing activity, although the pace of improvement showed signs of slowing due to weakening export orders.

However, VNDirect notes that the market still faces risks of rising inflation due to elevated global oil prices and uncooled geopolitical tensions in the Middle East. These factors could intensify concerns about global interest rate prospects and economic growth, further impacting investor sentiment. If the US Federal Reserve (Fed) raises interest rates by 25 basis points in its October meeting, foreign investors may continue net selling, adding pressure to the market.

Trong Hieu