Territorial clashes with China have pushed Vietnam's shares down more than 10 percent over the past month and even though tensions haven't eased, some analysts are tipping a bargain buying opportunity.
"Political friction with China is nothing new, but the recent action is admittedly quite aggressive and rekindled the dispute between Vietnam and China that had been dormant for months," CIMB said in a note Monday.
But it added, "Stock prices are likely to rebound once the current situation inevitably dies down. We believe that there is limited downside from here, assuming no shooting actually breaks out."
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Vietnam became a frontier market darling in the first quarter, with the benchmark index shooting up over 20 percent from the beginning of the year until it touched a high in mid-March. Since then the index has dropped more than 16 percent, with a drop of nearly 12 percent so far in May.
But CIMB noted that its local partner, retail broker VN Direct, estimates margin-funded positions have dropped by about half over the past few weeks to around $250 million, indicating liquidation-driven selling is likely mostly done.