Enter the Year of the Horse. A step up in class, steady reins – January 2026

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Monthly Insights

January’s data indicates a synchronised expansion across production, demand, investment, and trade, reinforcing confidence that late-2025 momentum is carrying into 2026, and that Vietnam’s expansion is beginning to broaden. Headline inflation remained contained at 2.5%, preserving policy flexibility, while state budget revenue increased 20.4% YoY and reached 14.7% of the annual estimate in January, supporting capacity to sustain growth-oriented expenditure.

PMI remained firmly in expansion territory at 52.5, while the Index of Industrial Production (IIP) rose 21.5% YoY, led by manufacturing at 23.6% as export demand strengthened. The upswing also broadened into cyclical areas, including non-metallic minerals up 41.9% and motor vehicles up 36.6%, suggesting the recovery is extending beyond a narrow electronics cycle. Industrial employment increased 4.3% YoY, led by foreign-invested enterprises, a pattern more consistent with firms adding capacity than simply raising utilisation.

Domestic demand remained supportive. Retail sales and services revenue grew 9.3% YoY in nominal terms, or 6.3% in real terms. Tourism continued to improve, with international arrivals close to 2.5 million, up 18.5% YoY, while passenger traffic rose 16.3% ahead of the Lunar New Year period, reinforcing a steady consumption backdrop as services continue to normalise.

Investment and external activity also began 2026 on a firm footing. Public investment disbursement reached $1.7bn, up 19.3% YoY, while FDI disbursement matched this level at $1.7bn, up 11.3% YoY and marking the strongest January in five years. Over 80% of realised FDI was in manufacturing, reinforcing Vietnam’s role in regional supply chains. Private-sector activity strengthened materially, with nearly 49,000 enterprises newly established or resuming operations, up 45.6% YoY. Newly registered firms alone rose 126.8% and registered capital increased 92.3%, signalling domestic corporate expansion remains active despite an uncertain global backdrop. External trade turnover rose 39.0% YoY to $88.2bn, with exports up 29.7%, led by electronics (+57.6%) and machinery (+40.2%), supporting the near-term industrial outlook.

Equity markets opened 2026 strongly before entering a phase of consolidation. The VN-Index reached a new all-time high of 1,918.46 in the second week of January before ending the month at 1,829.04, up 4.0% MoM in USD terms. Liquidity held firm and foreign activity remained mixed, with intermittent strong net-buying sessions. Several state-owned enterprises (SOEs) outperformed, supported in part by improving expectations around Resolution 79, which emphasises operational efficiency and stronger accountability for SOEs. If implementation follows through, this could broaden market leadership by sharpening differentiation within the SOE universe and support valuations over time.

From an investor perspective, the January mix remains constructive because it points to both cyclical momentum and improving breadth. Manufacturing remains the anchor, but firmer services activity and real consumption reduce the risk that growth becomes overly reliant on external demand. The surge in new business formation and registered capital is particularly important, as it signals that domestic corporates are preparing to expand, a dynamic that could meaningfully broaden the future earnings pool. The primary caution is seasonality, as January data can be influenced by timing effects around the Lunar New Year, making follow-through in February and March a more important test of underlying momentum. If industrial strength persists and inflation remains contained, policy conditions should stay supportive. In that environment, the equity market’s focus is likely to centre on earnings delivery and whether foreign participation evolves from episodic to sustained.