SSI Chief Economist: Upgrading the market, an opportunity to welcome new foreign "sharks"

The first step to the top of the emerging market group

Mr. Pham Luu Hung, Chief Economist of SSI Securities Corporation, expressed his joy with the decision on October 8 from FTSE Russell and assessed this as very positive information for the Vietnamese stock market.

The Vietnamese market has met all the criteria for upgrading and will continue to be reviewed in March 2026 with issues related to global brokers.

Talking to investors, SSI Chief Economist added that FTSE's information announcement also clearly stated that Vietnamese management agencies have solutions for this problem and they believe that Vietnam can completely implement it, helping to make the market more transparent and resolve difficulties and problems from investors.

“To be more specific, I understand that these are concerns related to the story of opening accounts. And in fact, in Vietnam, the State Securities Commission, the State Bank and relevant parties have revised many circulars to remove difficulties in opening accounts for foreign investors. And up to this point, opening accounts for foreign investors has been quite favorable. However, foreign investors may still have compliance issues from their perspective and wish for a more flexible mechanism,” Mr. Hung commented.

In essence, the decision to upgrade from FTSE has alleviated many concerns from investors, and at the same time clearly demonstrated the ability of effective cooperation between management agencies and FTSE in this upgrading process.

In fact, over the past year, Vietnam has done a lot. From the non-prefunding mechanism applied in November 2024, to policies on shortening the time to open accounts for foreign investors, amending Decree 155, shortening the time for IPO and listing...

In particular, the implementation of the KRX system is highly appreciated by foreign investors, as transaction latency is reduced, equivalent to that of countries in the region and affirms that the Vietnamese market has a good enough information technology system.

With these efforts, Mr. Hung believes that Vietnam is affirming the value of the market and currently, compared to the upgraded countries, the Vietnamese market is no longer in the bottom group but is gradually moving up to the middle group after the upgrade and when it develops further, the top of the EM bloc will still call Vietnam's name.

Foreign investors and the long-term story

In the market, investor concerns still exist with strong net selling by foreign investors at present and funds closely following frontier markets are likely to sell when Vietnam is upgraded.

However, assessing this concern, SSI Chief Economist said that the above fund group still has a long time to restructure its portfolio, not to sell too soon and in fact, the number of funds using the Frontier index is not much.

Meanwhile, the process of capital market development is not only about upgrading. There are many other stories in market development that management agencies as well as market participants are trying to participate in.

For example, to increase the depth of the market, IPO activities still need to be promoted. When there are many large IPO deals in the market during this time along with the market's development momentum, this will become an opportunity to attract more foreign investors to the Vietnamese market.

Other attractive points of the market from the growth story, IPO activities, new listings will increase the interest of foreign investors. And according to SSI experts' estimates, if the Vietnamese market can attract foreign capital from these factors, the value could be even greater than passive funds buying Vietnamese stocks when the market is upgraded by FTSE.

In addition, Mr. Hung believes that not only existing investment funds, the market will also welcome new investment funds, new "sharks" that have never appeared in Vietnam. This is also what the market expects when it is upgraded. Investors can monitor the index of the number of securities accounts of foreign investors, which is periodically announced as a research index - the fact that this number increases in the coming time and increases sharply is a good indicator proving the impact of the market upgrade.

SSI's chief economist predicts that the market upgrade topic will continue for the next 1-2 years because in reality, the FTSE's upgrade to secondary emerging market is just the starting point.

The Vietnamese market could be upgraded to higher levels, depending on liquidity, capitalization and the ability to list more large stocks… This would raise the market to the FTSE's Advanced Emerging Market threshold.

And along with that, Vietnam's stock market will continue with the story of MSCI's upgrade - this is a widely used index and is of great interest to foreign investors. If this threshold is reached, Vietnam can be completely confident with the scale of foreign capital flowing in.

Mr. Pham Luu Hung commented that the market development is being carried out not only to meet FTSE's EM requirements but also to gradually approach MSCI. For example, the CCP implementation plan is not included in FTSE's requirements, but this is an important factor to gradually approach MSCI's criteria.

Therefore, the road ahead for Vietnamese securities will be long and today's upgrade is just the first step for Vietnamese securities to move towards a comprehensive upgrade.

Source: https://baodautu.vn/kinh-te-truong-ssi-nang-hang-thi-truong-co-hoi-de-don-cac-ca-map-ngoai-moi-d406528.html