Securities boost bank credit.

The Vietnamese stock market has attracted attention recently with a strong upward trend, rising from around 1,580 points to over 1,930 points, surpassing its historical peak.

Currently, the VN-Index is fluctuating around 1,860 points, supported by positive news thanks to the roadmap for upgrading from a frontier market to a secondary emerging market according to FTSE Russell standards. Once Vietnamese stocks are officially upgraded, emerging market investment funds will begin to disburse funds and buy shares.

Stocks will serve as a channel for capital flow into the economy , reducing the pressure of dependence on bank credit.

However, in the current context, foreign investors are creating significant psychological pressure by selling heavily on the Vietnamese stock market. This trend has continued for several years. Since the beginning of 2016 alone, foreign investors have sold over 60 trillion VND net, putting considerable pressure on the VN-Index, especially given the relatively weak domestic capital flow. In reality, from a stock market perspective, the upgrade announcement had already been reflected in stock prices beforehand, so it no longer comes as a major surprise.

The outlook for the Vietnamese stock market will be more positive as, from now until September 2026, foreign investors will stop net selling or balance their positions and then return to net buying, boosting investor confidence. At that time, emerging market investment funds will disburse funds with long-term and stable capital flows, potentially improving the valuation of Vietnamese stocks compared to the current situation.

Upgrading to FTSE Russell could also be a stepping stone for Vietnamese stocks to be considered for higher-level indices in the future, such as MSCI. This would lead to a much larger flow of capital, thereby supporting the Vietnamese stock market, reducing pressure on the USD/VND exchange rate, and creating a more stable source of medium- and long-term capital for the economy.

Securities will serve as a channel for capital flow into the economy, reducing the pressure of dependence on bank credit. The Vietnamese economy currently still relies heavily on credit. If businesses can raise capital through the stock or bond market, the capital flow structure will be more diversified and sustainable.

For the Vietnamese stock market to effectively support and boost the banking credit channel, more quality products are needed. Currently, the number of stocks that truly meet the criteria of foreign funds is still limited; some good stocks have already reached their foreign ownership limits (room). The market also needs more stocks from companies in emerging fields such as artificial intelligence (AI), semiconductors, and high technology. The Vietnamese stock market still lacks strong companies representing these sectors. This is also partly why foreign capital has not returned strongly in recent times.

The Vietnamese stock market also needs to diversify its financial products, such as short selling, T0 trading, and pension funds, to increase market depth and provide foreign investors with more tools to diversify their portfolios. Listed companies themselves need to improve governance standards, transparency, especially in disclosing information in English, and ensure fairness to foreign investors. The stock market's trading system also needs to be continuously upgraded to meet greater liquidity in the future.

Source: https://nld.com.vn/chung-khoan-tiep-suc-tin-dung-ngan-hang-196260528220509956.htm