Hanoi (VNA) - Vietnam’s financial authorities are racing to upgrade the country’s stock market from frontier to emerging status by September 2025, a move that could unlock opportunities for domestic and global investors and cement Vietnam’s place on the international financial stage.
Aligning with international standards
The push aligns with a broader strategy to meet global standards, with the Ministry of Finance (MoF) issuing new regulations to enhance transparency and efficiency in securities transactions, clearing, settlement, brokerage operations, and information disclosure.
Hoang Van Thu, Vice Chairman of the State Securities Commission (SSC), described these changes as a foundation for a more transparent and efficient payment, custody and clearing mechanism, a prerequisite for the upgrade.
A major step forward came in May with the launch of the Korea Exchange’s KRX trading system, which has run smoothly and bolstered investor confidence.
More reforms are in the pipeline, including a decree to loosen foreign ownership caps in listed firms. The MoF, along with the SSC and the State Bank of Vietnam (SBV), has also simplified processes for foreigners to open local-currency accounts for indirect investments. “These are critical steps to improve market access,” Thu said.
Market gains momentum
The Vietnamese stock market is showing signs of vitality. The VN-Index, a benchmark for the Ho Chi Minh Stock Exchange, closed last week at 1,386.97 points, a 1.13% increase from the prior week and its highest close in over three years. Trading volume hit a seven-week peak at 26.22 trillion VND (1.1 billion USD), the MB Securities data showed.
By some metrics, the market remains relatively inexpensive. Its price-to-earnings ratio of 14.1 is below the five-year average of 15.6, a factor that could appeal to long-term investors. Sectors like banking, retail, steel, and telecom are tipped to draw fresh capital as optimism grows over the upgrade and potential foreign inflows.
Enhancing market transparency, efficiency
Deputy Minister of Finance Nguyen Duc Chi said the upgrade would open doors for global funds eyeing exposure to one of Asia’s fastest-growing economies. Beyond technical aspects, international rating agencies are keeping a close eye on foreign investor experiences, particularly the ease of access and operational efficiency.
“Securing emerging market status is tough, but staying there is tougher”, Thu warned. To address this, Vietnam is introducing omnibus accounts to simplify institutional investing and enhance market efficiency.
Dr. To Hoai Nam, a member of the National Council for Sustainable Development, Standing Vice Chairman and Secretary General of the Vietnam Association of Small and Medium Enterprises, said a transparent and well-regulated financial market is vital for long-term economic growth. He urged stronger legal frameworks, tougher oversight to combat market manipulation and false rumors, and greater autonomy for the SSC.
Easing foreign ownership caps in non-sensitive sectors, he said, could further burnish Vietnam’s appeal.
In the long term, he suggested allowing select fund certificates to trade in foreign currencies to boost indirect foreign investment. He also called for faster digital transformation of the securities market to improve transaction speeds, minimise technical glitches, and prevent system congestion./.
