Stock market ready for upgrade boost

A series of important changes

From mid-June 2025, with Circular No. 03/2025/TT-NHNN officially taking effect, investment funds, foreign securities companies, financial institutions under the Government or international institutions can easily open indirect investment accounts corresponding to the assigned securities transaction codes. "Foreign organizations can complete procedures online and it only takes 1 day to get a transaction code," Mr. Bui Hoang Hai, Vice Chairman of the State Securities Commission, added at the Techcombank Investment Summit 2025.

This is just one of many changes in the effort to reform the stock market. According to a representative of the State Securities Commission, the Vietnamese economy is undergoing revolutionary changes, in which the stock market has recorded fundamental changes. Legally, decrees are about to be issued after the amended Securities Law; legal documents related to digital assets, transactions on the carbon market, the market for innovative startups, etc. are also being drafted.

Along with that, in line with the Government's goal of reducing 30% of business conditions, administrative procedures, and compliance costs for businesses, the State Securities Commission is reviewing products and regulations on the market to gradually approach common international practices. In terms of infrastructure, 2025 also marks the putting into operation of the KRX technology system.

“One of the notable recent changes is the implementation of reforms to increase foreign investors’ access, focusing on market upgrading solutions. We have had strong administrative procedure reforms, as well as a long list of reforms that are being and will be implemented in the coming time,” Mr. Hai emphasized.

The above changes are expected by market participants, especially the amendment of Circular 17/2024/TT-NHNN on not requiring consular legalization when opening a foreign currency account and the amendment of Decree 155/2020/ND-CP requiring mandatory disclosure of foreign ownership limits for all public companies. The draft implementation process for the master account (OTA) was also developed under the coordination of the State Securities Commission, the Vietnam Securities Depository, exchanges and the KRX system provider.

The completion of the legal corridor and infrastructure is bringing Vietnam closer to the goal of upgrading the stock market.

Choice of foreign cash flow

According to SSI Research, FTSE's upgrade of Vietnam's stock market could attract about $1 billion from ETFs, not including active funds. Experts from VPBank Securities Joint Stock Company (VPBankS) also forecast that passive and active capital flows into Vietnam could reach $3-7 billion.

According to Mr. Tran Hoang Son, Director of Market Strategy, VPBank Securities Joint Stock Company (VPBankS), about 70% of Vietnam will be upgraded in September 2025. However, there is a 30% chance that the market will upgrade in March 2026 due to issues related to differences in settlement time and securities distribution time on KRX, as well as the small number of error transactions, FTSE needs more time to evaluate and handle the errors.

Meanwhile, Mr. Pham Luu Hung, chief economist of SSI Research, is more confident, saying that there is a 90% chance that Vietnam will be announced as an emerging market by FTSE Russell in October 2025.

VPBankS Market Strategy Director said that the net buying by foreign investors since the beginning of July is somewhat similar to the trend of investors net buying before, during and after upgrading in many other markets. By the end of last week, foreign investors had had 8 consecutive net buying sessions, with a total disbursement value of nearly VND11,500 billion. The net buying volume was almost equal to the entire net selling value of the previous second quarter, showing that sentiment is changing positively.

According to SSI Research, the market's forward P/E has increased from 8.8x (April 9) to 11.9x (July 9), but is still lower than the 5-year average (12.8x). Compared to other emerging markets, Vietnam has an advantage in valuation. Therefore, according to experts, Vietnam's expected upgrade to emerging market status by FTSE Russell in October 2025 will not only help attract foreign capital but also strengthen the attractiveness of valuation.

Although the overall market valuation has improved, not all stocks have benefited directly, because foreign capital inflows are disbursed selectively. In the past days of July, the stock that foreign investors have disbursed the most is SSI with a disbursement value of VND 2,648 billion, equivalent to nearly 1/4 of the total net purchase value. Foreign money also flows into FPT (VND 1,172 billion), SHB (VND 1,047 billion), or other large stocks such as HPG, VPB, VIX, HCM, MWG.

According to SSI's estimates, the $1 billion cash flow from ETFs when the Vietnamese stock market is upgraded will flow into about 15 stocks with a purchase value of over $20 million. Of which, Vingroup (VIC) stock can attract up to $161 million, VHM about $119 million, MSN, VNM, HPG, SSI, VCB all have a capital attraction scale of over $50 million. Many stocks in the group of strong net purchases in recent days such as SSI, HPG, VIX and SHB also appear on this list.

In addition to the expectation of foreign capital inflows into the secondary market, experts from VPBankS believe that the market still has opportunities from initial public offerings (IPOs) to attract foreign capital in the period from late 2025 to early 2026, similar to the successful capital sale story of Vinamilk (VNM) shares a decade ago. The most notable of these is the IPO plan of Techcom Securities Company (TCBS) expected to be implemented between the third quarter of 2025 and the first quarter of 2026.

Source: https://baodautu.vn/thi-truong-chung-khoan-san-sang-cho-cu-hich-nang-hang-d328933.html