Market upgrade: Opportunity to mobilize "dynamic capital flow" on stocks

Rating agency FTSE Russell will announce the results of its assessment of the Vietnamese market in its September review, a strategic step that opens up the possibility of attracting large-scale international capital flows.

Vietnam’s stock market is facing a historic moment with a strategic turning point that could reshape the country’s economic position for decades to come. The goal of upgrading from a frontier market to an emerging market is becoming a drastic and synchronous roadmap of action from the Government to management agencies.

This is an opportunity to welcome large-scale international capital flows, improve market quality and affirm Vietnam as a transparent, sustainable and potential investment destination on the global financial map.

The above information was given at the Workshop "Upgrading the stock market, expanding capital mobilization channels for the economy," organized by Lao Dong Newspaper in coordination with the Ministry of Finance on July 30.

Historical opportunity intersects with reform pressure

Upgrading the market is identified as a major policy of the Party and the State. In Resolution No. 68-NQ/TW of the Politburo on private economic development, the viewpoint is clearly stated: "Urgently upgrade and restructure the stock market to improve quality and expand stable, low-cost capital mobilization channels for the private economy."

According to the plan, the FTSE Russell rating agency will announce the results of the assessment of the Vietnamese market in the upcoming September review period. This is a strategic step, opening up the possibility of attracting large-scale, stable and long-term international investment capital flows.

In a volatile world with strong geo-economic shifts, Vietnam is emerging as a strategic bright spot. (Photo: Vietnam+)

In a volatile world with strong geo-economic shifts, Vietnam is emerging as a strategic bright spot. At the conference, experts commented that Vietnam is entering a pivotal period with the capacity to transform its growth model and financial market.

Analyzing the context, Dr. Chu Tuan Linh, lecturer of the Graduate School, Hung Vuong University, said that Vietnam is at a historical crossroads, a pivotal period of development, unleashing resources in the people and businesses. This is a time for reform - a rare period with historical opportunities and reform pressures converging.

According to Mr. Linh, the restructuring of the global supply chain, along with the downward trend in interest rates, is creating ideal conditions for international capital flows to shift to emerging markets with stable macro-economic foundations such as Vietnam. At the same time, trends in digital revolution, green transformation and ESG (Environmental - Social - Governance) standards have become mandatory requirements, creating pressure but also motivation for the Vietnamese capital market to proactively move forward, playing a pivotal role in providing capital for the economy.

Take drastic action

Seizing this opportunity, State management agencies, headed by the Ministry of Finance and the State Securities Commission, have implemented many comprehensive and drastic solutions to meet the upgrading criteria of international organizations, especially FTSE Russell.

Sharing about the specific roadmap, Ms. Pham Thi Thuy Linh, Head of the Securities Market Development Department, State Securities Commission, affirmed the determination of the management agency: With the goal of upgrading the Vietnamese stock market stated in Decision No. 1726/QD-TTg of the Prime Minister, the State Securities Commission has been urgently reviewing and proposing amendments and supplements to legal documents to gradually remove bottlenecks in considering upgrading.

Ms. Linh said that according to tradition, FTSE Russell's September review is the official review. If it is rated well, Vietnam can be included in the list of secondary emerging markets.

“Up to now, legally, the Ministry of Finance has issued solutions to fully meet the 9 criteria of the FTSE Russell rating organization. However, the experience and positive feedback from foreign investors is still an important basis,” Ms. Linh emphasized.

To realize the goal, the State Securities Commission is focusing on key solutions. Specifically, removing the bottleneck on foreign ownership ratio (foreign room). Currently, the draft amendment to Decree 155/2020/ND-CP is being submitted to the Government, aiming to make information on foreign ownership ratio transparent and simplify procedures for businesses. Ms. Linh said that the State Securities Commission will continue to coordinate with ministries and branches to review and reduce business lines with foreign ownership limits while encouraging businesses to proactively streamline their registered business lines to expand the "room" for foreign investors.

Regarding the implementation of the central counterparty clearing mechanism, Ms. Linh emphasized that this is a key factor for the modern market. Accordingly, the legal basis and technical infrastructure on the KRX system are basically ready. The State Securities Commission has announced a specific roadmap for the implementation of the central counterparty clearing mechanism in early 2027 and is urgently completing related regulations.

In addition, Ms. Linh shared that the State Securities Commission is closely coordinating with the State Bank to amend regulations on opening and using payment accounts, in order to simplify procedures and create more favorable conditions for foreign investors to participate in the market.

“In the coming time, the State Securities Commission will focus on developing new products such as green bonds, ESG-oriented products; promoting equitization, divestment of state capital, linking IPOs with listings to attract businesses. In particular, bringing FDI companies to the stock exchange and researching and implementing new markets such as carbon credit exchanges and capital markets for startups,” Ms. Linh shared.

One of the most important milestones, creating a solid foundation for the upgrading process, is the implementation of the KRX information technology system. This is not just a technical upgrade but a comprehensive change in infrastructure, allowing the deployment of new products and services according to international standards.

Mr. Nguyen Son emphasized that the KRX system has been operating stably, without any serious errors affecting market operations. (Photo: Vietnam+)

According to Mr. Nguyen Son, Chairman of the Board of Members, Vietnam Securities Depository and Clearing Corporation (VSDC), the KRX system has officially been operational since May 5, 2025. After nearly three months of operation, the KRX system has initially operated stably, without any serious errors affecting market operations.

“This can be said to be a very important initial success, creating a premise for VSDC and the 2 Stock Exchanges to continue researching and implementing new service products that have been integrated into the KRX system,” said Mr. Son.

In addition, Mr. Son affirmed that the stable operation of KRX will be the basis for implementing the central clearing counterparty mechanism (for the underlying market) as well as modern transactions, such as intraday trading (T+0) and covered short-selling, meeting the strict requirements of rating organizations.

Source: https://htv.com.vn/nang-hang-thi-truong-thoi-co-huy-dong-dong-von-nang-dong-tren-chung-khoan-222250730164226401.htm