News and Insights

• Manufacturing and exports remained the key drivers for growth in November, albert domestic consumption and public disbursement are still heavily affected by the severe floods in the Central and South-Central of Vietnam.
• As a result, November saw headline CPI rising 0.45% MoM, owing to increase in food and foodstuff prices in provinces directly affected by floods, as well as increase in domestic gasoline prices.
• The VN-Index rebounded 3.1% and rose 51 points to 1690 in November but the Vingroup family alone contributed 70 points. We observe sentiment turned risk-off in the month as interest-rate sensitive sectors saw sustained outflows.

The manufacturing sector continued to expand in November. The index of industrial production (IIP) increased by 2.3% month-over-month (MoM) or 10.8% year-over-year (YoY), with robust manufacturing (up 11.8% YoY). Trade activities, closely linked with industrial production, were solid in November with sustained double-digit growth in both exports (up 15.1% YoY) and imports (up 16% YoY). Trade surplus amounted to USD 1.1 billion in November and USD 20.5 billion through the first 11 months of the year. There has been strong growth in key exports products such as electronics (up 53.5% YoY), toys (up 175.4% YoY), and fishery (up 8% YoY). The growth of employees in the manufacturing sector remained positive at 3.7% YoY in November albeit slightly lower than previous months. Meanwhile, the manufacturing PMI posted 53.8 in November, down slightly from 54.5 in October but still signaling a solid monthly improvement in business conditions in the manufacturing sector.

 

Foreign direct investment (FDI) remained resilient in November with FDI disbursement over the first 11 months of 2025 increasing by 8.9% YoY to USD 23.6 billion, which is the highest level in the past five years. Disbursement in manufacturing sector reached USD 19.6 billion, accounted for 83% of total disbursement. FDI commitments grew by 7.4% YoY to reach USD 33.7 billion in 11M25, although new registrations declined -8.2% YoY. Public investment accelerated in November and rose by 39.2% YoY over the first 11 months of this year, achieving VND 553 trillion (USD 21 billion) or 61% of the Prime Minister’s target. Regarding private investments, credit growth reached 16.1% as of November 21, which was higher than 11.1% growth recorded in the same period in 2024 and indicated stronger credit demand. Nevertheless, contrary to historical practice in prior years, the SBV has not yet adjusted the credit quotas for commercial banks amid this year-end high season, reflecting a more cautious approach to monetary management.

Consumption has not yet improved in November, with retail sales increasing by 7.1% YoY, similar to October data as it is still significantly impacted by floods in Central and South-Central regions. For the first 11 months of 2025, retail sales grew by 9.1% YoY (real growth reached 6.8% YoY), which remained below pre-COVID levels of 10-12%. On the other hand, tourism activities supported retail sales as the number of international visitors continued to grow strongly 15.6% YoY in November. Year-to-date, this number reached over 19.2 million, up meaningfully 21% YoY and equivalent to 117.5% of pre-COVID level in 2019.

November saw headline CPI rising 0.45% MoM, primarily due to an increase in food and foodstuff prices (up 0.95% MoM) in provinces and cities directly affected by severe floods and increase in transportation costs (up 1.07% MoM) owing to an increase in domestic gasoline prices (up 2.41% MoM). On a YoY basis, headline inflation inched up 3.58% YoY in November from 3.25% YoY in October. Thus, inflation averaged 3.29% YoY over the past 11 months, well under control within the Government’s target range of 4.0% – 4.5% YoY for 2025.

The VND depreciated by 0.2% MoM against the USD in November and depreciated 3.4% YTD, with added pressure from the announcement of the State Treasury buying USD 100mn. The spread between the free market and official USD/VND exchange rates has stayed wide since mid-October, at an average of over 5%. Although this gap has started to narrow since mid-November, it remains notably above its normal range, reflecting lingering VND depreciation expectations and ongoing FX hoarding by households. In the near term, the usual year-end pick-up in remittances, expectations of another FED rate cut in December, should help stabilize the currency.

The SBV continued to provide moderate support with a net injection of VND 106.4 tn in the month, bringing the outstanding OMO balance to reach VND 330 tn, up 47% compared with end-October, indicating that short-term funding demand in the banking system has yet to cool down. The overnight lending rates on the interbank market stayed elevated at 5.5% on average and there has been certain days that it briefly spiked to 6.5%. This marks a clear sign of mounting liquidity pressure, driven in part by the unusual shift of some traditional liquidity providers into the borrower camp. On the retail/corporate market (market 1), deposit rates at some banks continued to rise by around 20–50bps in November. 

The VN-Index rebounded 3.1% and rose 51 points to 1690 in November but the Vingroup family alone contributed 70 points. Capital flows have rotated into defensive consumer and dividend-paying names (VNM, SAB, GAS, POW) and into select niche, low-liquidity stocks, as sentiment turned risk-off and high-beta, interest-rate-sensitive sectors saw sustained outflows. The tight liquidity backdrop in the banking system has directly weighed on equity trading, with November ADTV falling 31% MoM to just USD 961mn. We expect conditions to gradually normalize as credit growth resumes next year. Foreign investors net sold USD 312mn during the month. Top net sells include STB (-USD 80.6mn), VCI (-USD 51.3mn) and MBB (-USD 45mn) while top buys include FPT (+USD 68.7mn), HPG (+USD 65.8mn) and VNM (+USD 60.7mn).

From a sector perspective, the real estate sector continued to outperform with the strongest gains of 17.3% MoM, driven by VIC (+36.3% MoM), followed by consumer discretionary (+7% MoM) and consumer staples (+2.1% MoM). In contrast, information technology (-5.9% MoM), communication services (-3.6% MoM) and healthcare (-2.4% MoM) were the top laggards. 

The VN-Index is trading at a trailing P/E ratio of 16.4x, below its average P/E ratio of 17.1x over the past 5 years. Weakening liquidity suggests investors remain cautious as the VNI approaches the 1,700-point resistance amid a lack of clear catalysts, persistent profit-taking and continued foreign net selling. In our view, VNIndex seems to have completed its short-term correction from September to November, however divergence will continue. We expect the market may become more balanced, with money flow spreading toward stocks that are expected to report good Q4 earnings and traded at attractive valuations in the near term.