Efforts to upgrade the stock market by September 2025

A synthesis report by the Joint Stock Commercial Bank for Investment and Development of Vietnam ( BIDV ) and the Asian Development Bank (ADB) in Vietnam, along with experts and policy makers, shows that in 2024, capital mobilization from the stock market (including the issuance of corporate bonds and stocks) will grow positively, with an increase of 37.6% (in 2023, it only increased by 12.93%). In particular, the corporate bond market has the largest growth rate (25.9%) with a total issuance value of VND 443.5 trillion. Currently, the Vietnamese stock market has over 9 million investor accounts.

However, besides that, the stock market is expected to face many challenges from the US tariff policy in 2025, but with timely and drastic response measures from the Government and the opportunity to attract cash flow from the expectation that FTSE Russell (FTSE Russell is an independent organization responsible for creating indices for the global financial market. Indexes issued by FTSE are widely used to measure the performance of the stock market and specific segments of the economy . FTSE Russell is owned by the London Stock Exchange, UK. FTSE Russell is also one of the three leading index providers in the world including: MSCI, FTSE Russell and S&P Dow Jones Indices) can upgrade the Vietnamese stock market in September 2025, the medium and long-term stock market outlook remains positive.

In the frontier market index classified by MSCI and FTSE, Vietnam ranks No. 1 in terms of weight, however, its capitalization, liquidity, and number of shares have long met the criteria of an emerging market, even ranking above many other countries in the region and the world.

Right from the beginning of 2025, the Ministry of Finance and the State Securities Commission have sent out strong messages when requiring the stock market to be upgraded this year, and promptly implementing specific actions so that 2025 will be a year of breakthrough development in both scale and quality, continuing to affirm itself as an effective medium- and long-term capital mobilization channel for the economy and an important macro-management tool of the Government. This shows the strong determination of the leaders of the financial sector in realizing the goals mentioned in Decision No. 1726/QD-TTg dated December 29, 2023 of the Prime Minister on Approving the Stock Market Development Strategy to 2030 as well as Resolution No. 01/NQ-CP dated January 8, 2025 issued by the Government at the beginning of 2025.

Mr. Ha Duy Tung, Vice Chairman of the State Securities Commission, said that recently, the Ministry of Finance has also completed the legal framework and policy mechanisms to meet the criteria for upgrading the market of international organizations.

The most recent document was in September 2024, when the Ministry of Finance issued Circular 68, allowing foreign institutional investors to place orders to buy stocks on the Vietnamese stock market without having enough money in their accounts at that time, thereby clearing the bottleneck of margin requirements when placing orders to buy stocks that rating organizations are particularly interested in.

Not only that, this Circular also adds a provision that public companies must disclose information in Vietnamese and English at the same time. This is also a criterion that the MSCI rating organization (MSCI is a reputable company specializing in providing financial market analysis tools headquartered in New York, USA. This company periodically publishes market classification results for stock markets around the world, including Vietnam) assesses that the Vietnamese market needs improvement. These regulations take effect from November 2, 2024 and are expected to be an important step for the stock market to be upgraded in 2025.

In terms of the legal system, the Vietnamese stock market has basically met the criteria of international organizations for market upgrading. However, the market ranking depends on the experience of investors as well as actual assessment. "Therefore, in the coming time, the Ministry of Finance is also continuing to handle technical issues as well as implementing dialogues and investment promotion so that foreign investors continue to have more positive assessments and actual experiences, on that basis, aiming to implement market upgrading this year," Mr. Tung added.

Vietnam's stock market is expected to be upgraded in September 2025.

On April 9, 2025, FTSE Russell announced the results of the interim classification assessment of stock markets for the March 2025 period, according to which Vietnam continues to be on the "Watch list" to be considered for upgrading from a frontier market to an emerging market.

This March 2025 market assessment report is considered positive compared to previous reports when it did not mention 3 factors to consider in the previous report, including: operating rules from the Vietnam Securities Depository and Clearing Corporation (VSDC) after VSDC issued regulations to guide the implementation of NPF solutions (transactions, payment of stock purchase transactions do not require sufficient funds when placing orders).

Accessibility of information to foreign investors after enterprises have started publishing bilingual reports according to the roadmap prescribed in Circular 68 and a clear roadmap on how to implement the new regulations after the State Securities Commission issues a specific roadmap on March 11, 2025.

According to the research team of BIDV Bank and ADB Bank, in September 2025, FTSE Russell will officially announce its approval to upgrade the Vietnamese market to a secondary emerging market.

It is predicted that if the Vietnamese stock market is upgraded, it will attract a large amount of foreign indirect investment capital. Specifically, it will receive a minimum of 700 million - 1.5 billion USD from ETFs/active funds. In addition, foreign investors will usually net buy 3-4 months before FTSE makes an announcement and 4-5 months for MSCI (however, it also depends on the foreign room of listed Vietnamese enterprises).

Create an effect on the commitment of the management agency in market reform. Create a favorable basis to attract financial institutions and institutional investors to participate in the market. Can increase domestic FDI inflows in the past when MSCI upgraded the market, helping FDI in India increase by +49% and Egypt increase by +63% within 1 year and will improve the internal governance capacity of domestic enterprises.

Mr. Nguyen Duc Chi, Deputy Minister of Finance, commented: Our goal is to develop the stock market in terms of quality, substance, stability and sustainability. Once we do all of that, we will of course be upgraded.

"However, the upgrade is just a "knot" in the process of sustainable development of the stock market in terms of quality and quantity. The task of the State management agency, organizations and individuals participating in the market is to build and develop a sustainable stock market with increasingly high quality. That is the ultimate goal we must strive to achieve," Mr. Chi emphasized.

In addition to the efforts of the Ministry of Finance, in 2024, the State Bank also sought opinions on the draft amendment to Circular 05/2014/TT-NHNN to create more favorable conditions for opening and monitoring foreign investors' accounts (such as considering allowing reputable intermediaries to confirm investors' qualifications).

If the State Bank issues it in 2025, it will be an important change for the banking system in moving towards the market upgrade target set by the Government. With strong commitments to achieving the goal of upgrading the stock market and building a sustainable capital market, the remaining MSCI upgrade criteria will be met by 2026, and it is predicted that the Vietnamese market will likely be officially upgraded to emerging market status by MSCI in the June 2027 review.

Source: https://nhandan.vn/no-luc-nang-hang-thi-truong-chung-khoan-vao-thang-92025-post879948.html