Expert: The possibility of a stock market upgrade is very close

(Dan Tri) - Experts believe that the possibility of Vietnam's stock market being upgraded is very close, as the Government, management agencies, and businesses are continuously promoting conditions to meet the upgrade.

Determined to upgrade the stock market

The Government recently issued Decree 245 amending and supplementing a number of articles of Decree 155 to resolve a number of difficulties in stock market operations.

The general objective of the project is to contribute to the implementation of the Party and State's guidelines and policies on developing the stock market into an important medium- and long-term capital mobilization channel for economic development, perfecting the market economic institution under State management, and enhancing regional and international economic integration.

The short-term goal is to fully meet the criteria for upgrading from a frontier market to a secondary emerging market by FTSE Russell in 2025; maintain the secondary emerging market rating of FTSE Russell.

Investors monitor stock market developments (Photo: D.D).

The long-term goal is to meet the criteria for upgrading to MSCI emerging market and FTSE Russell advanced emerging market by 2030.

In parallel, Deputy Prime Minister Ho Duc Phoc signed the Prime Minister's Decision 2014 approving the Project to Upgrade the Vietnamese Stock Market, with the goal of turning this market into an important medium- and long-term capital mobilization channel, while promoting regional and international integration.

The general objective of the project is to develop the stock market into an important medium- and long-term capital mobilization channel for economic development, perfect the market economic institution under State management, and strengthen regional and international economic integration.

"The possibility of being upgraded is very close"

Speaking with Dan Tri newspaper reporter, Mr. Phan Dung Khanh - Investment Consulting Director of Maybank Investment Bank - commented that Vietnam has continuously changed, supplemented, and met many conditions for the process of upgrading the stock market.

He said that foreign organizations have also taken steps to recognize many of the criteria that Vietnam has achieved. "The possibility of being upgraded is very close, as the Government, management agencies and businesses are continuously promoting the conditions to meet the upgrade," he shared.

In particular, Decree 245 of the Government, which has just been issued, continues to be one of the important solutions to achieve the goal of attracting foreign investment capital, supporting the process of upgrading the stock market, thereby creating resources for the country's economic development.

In particular, he emphasized that the market is increasingly open to foreign investors. Not only the securities sector, Resolution 05 of the Government on piloting the crypto asset market in Vietnam also creates momentum for foreign capital flows.

Decree 245 of the Government also focuses on removing barriers for foreign investors. In particular, the procedure for recognizing professional securities investor status is adjusted to comply with foreign legal documents, creating convenience when participating in individual issuances.

Looking at recent stock market developments, Mr. Khanh said that in the 5 years from 2020 to 2024, foreign investors had 4 years of net selling and only 1 year of net buying. Since the beginning of the year, foreign investors have also been net sellers but have returned to net buying.

Based on the market outlook, a representative of Maybank Investment Bank said that net selling will only happen in the short term. Because the stock market has been continuously breaking its peak recently, investors tend to take profits and so do foreign investors. With the Government's open policies towards foreign capital flows, he believes that in the medium and long term, foreign investors will return to net buying.

Investors trade on the stock market (Photo: D.D).

Sharing the same view, Dr. Dinh The Hien, an economic expert, also said that this decision demonstrates the Government's determination to perfect the legal corridor for the market. According to him, the upgrade is not simply a classification, but is linked to the strategy of building an international financial center in Ho Chi Minh City and Da Nang.

An international financial center can only develop when it owns a stock exchange that meets global standards, with quality listed products, from stocks to bonds. "The quality of goods on the floor is the key factor. Only businesses that are truly innovative, transparent and represent the entire industry can attract and retain foreign capital for a long time," he emphasized.

Mr. Hien further cited that many markets in the region have witnessed erratic foreign capital flows due to a lack of sustainable foundations. Therefore, Vietnam needs to focus on developing domestic enterprises into large-scale units, thereby creating a source of valuable listed goods.

The expert said that upgrading the stock market will help Vietnam attract international investors and create conditions for businesses to mobilize capital to expand production and business.

Upgrading the stock market is not a destination but a natural result.

Previously, at a working session with representatives of FTSE Russell (a subsidiary of London Stock Exchange Group, specializing in producing, maintaining, licensing and marketing stock market indices), Minister of Finance Nguyen Van Thang said that the Government is currently determined to achieve a GDP growth target of 8% or more in 2025, increasing rapidly but sustainably. To achieve the target, the Government has directed the Ministry of Finance to implement many important solutions, including promoting the development of the stock market.

Minister Nguyen Van Thang affirmed that upgrading the stock market is not a destination but a natural result when Vietnam steadfastly pursues core development goals towards a fair, transparent and effective stock market.

Headquarters of Ho Chi Minh City People's Committee (Photo: Hai Long).

Many securities companies also gave their opinions on the market outlook. VPBanks has a report, so most markets after being upgraded have recorded a surge in foreign capital flows, regardless of FTSE or MSCI criteria.

Normally, this capital flow is 5-7 times higher than the average level before the upgrade. This securities company estimates that the capital flow that can flow into the Vietnamese market is about 3-7 billion USD as soon as the upgrade decision takes effect. If foreign investors disburse quickly in the short term, the market will receive a huge boost.

Vietcap Securities believes that joining the emerging market group could help Vietnamese stocks attract 6-8 billion USD of foreign capital. According to SSI Securities, the Vietnamese stock market could attract about 1 billion USD from ETF funds thanks to the upgrade, not counting active funds. Notably, the Vanguard FTSE Emerging Markets ETF is forecast to disburse more than 363 million USD into the Vietnamese market.

Regarding the year-end outlook, Agriseco Securities forecasts that the VN-Index could reach the 1,700-1,800 point range by the end of 2025, thanks to expectations that the entire market's profit will grow by about 20% next year.

Along with that, many favorable macro factors will continue to support the market such as the Fed may start the interest rate cut cycle from September, the Government sets an economic growth target of 8.3-8.5% this year, at the same time promoting credit, loosening fiscal policy, accelerating public investment disbursement and aiming to upgrade the market by the end of 2025.

Source: https://dantri.com.vn/kinh-doanh/chuyen-gia-kha-nang-thi-truong-chung-khoan-duoc-nang-hang-dang-den-rat-gan-20250915145646145.htm