Vietnam Stock Market: Opportunity for Upgrade

The expectation from state management agencies, as well as market participants, including foreign investors, is to bring the Vietnamese stock market to a new level in the soonest time.

So, the opportunity is very close, it's just whether our efforts are enough and in the right direction or not. Previously, in the October 2024 review, FTSE Russell continued to keep Vietnam in the monitoring position to upgrade from frontier market status to secondary emerging market. Vietnam was added to this list in September 2018. However, since then, there have been many reasons why it has not been upgraded.

It is known that after the previous assessment, Vietnam has met 7/9 criteria to upgrade the stock market. Immediately after that, relevant agencies quickly took action, proposed amendments and supplements to legal documents, and actively coordinated with ministries and branches to resolutely implement solutions to meet the missing criteria.

In addition, the State Securities Commission also gave the green light to create conditions for the Vietnamese stock market to have more new innovative and breakthrough products, so that the market has more high-quality products, attracting more and more investors to participate; at the same time, promptly deploy information technology projects to modernize the management, supervision and operation of the stock market in accordance with international standards.

The expectation from the state management agency, as well as the market participants, including foreign investors, is to bring the Vietnamese stock market to a new level as soon as possible, when the conditions are ripe. As for the Vietnamese stock market, it can be considered a new stage, a higher level of development with real changes in quality - Developing the market quickly, substantially and sustainably, to bring benefits to the participants in the Vietnamese stock market.

An interesting thing that shows the optimism of investors when surveyed is whether or not Vietnam's stock market will be upgraded from frontier to emerging in 2025? Up to 68% of investors surveyed believe that the market will be upgraded in 2025, (according to a survey at the Bloomberg Businessweek Vietnam event in Ho Chi Minh City, December 5, 2024).

Wanming Du, director of index policy for the Asia-Pacific region at FTSE Russell, gave a promising figure, if Vietnam's stock market is upgraded. Accordingly, Vietnam can attract an additional capital flow of 5-6 billion USD from active and passive funds.

The regional equity advisory committee is scheduled to meet in the week starting March 10. The FTSE Russell Policy Advisory Council will meet on March 20 and finally the FTSE Russell Index Governing Council on April 2 – just six days before the official decision is announced.

It can be said that FTSE Russell's evaluation process is quite strict, real progress will be considered "plus points" for the review process and vice versa. Therefore, an optimistic mentality is necessary, but a mentality ready to continue to change is also very important.

With these developments, it is expected that the Vietnamese stock market will maintain an optimistic sentiment and especially a strong pace of innovation, creating competitive advantages, increasing investor confidence and attracting foreign capital flows, contributing to boosting the economy.