Vietnam seeks market enhancement to entice long-term financial investments
Vietnam's stock market is poised to upgrade from frontier to emerging market status by September 2025, following a series of comprehensive reforms and regulatory upgrades. This transformation is driven by the Vietnamese government's commitment to modernising market infrastructure, enhancing transparency, and attracting foreign investment.
The Securities Commission (SSC) is actively implementing measures to facilitate the participation of foreign institutional investors in Vietnam's stock market. Key initiatives include the launch of the Korea Exchange's KRX trading platform, enabling same-day settlements, and new regulations to enhance transparency and foreign ownership limits. These changes have already attracted significant foreign investment inflows, increased market capitalization to around $295 billion, and boosted liquidity and retail participation.
The Ministry of Finance (MoF) and the SSC are reviewing and proposing amendments to legal documents to address obstacles and meet international criteria for market upgrade. This includes overhauling market infrastructure with the KRX trading system and plans for a central counterparty clearing (CCP) mechanism by 2027. Regulatory adjustments are also being made to reduce foreign ownership caps and ease processes for foreigners to open local currency accounts.
Enhancing transparency and information disclosure standards is another priority, with simultaneous disclosure of information in both Vietnamese and English for listed and public companies now mandatory. The SSC is also working closely with the State Bank of Vietnam in developing Circular No.03/2025/TT-NHNN, which simplifies procedures and facilitates foreign indirect investment activities in the Vietnamese stock market.
The SSC has established an advisory dialogue group on capital market development to accelerate the upgrade process. This group, consisting of 33 members, is divided into three working groups focused on market and post-trade development. The upcoming FTSE Russell review in September 2025 will assess these comprehensive reforms and Vietnam’s market accessibility from the perspective of international investors. Achieving emerging market status will likely lead to increased inclusion in global indices and major capital inflows, further integrating Vietnam into the global financial system.
Vietnam's stock market has made remarkable progress over the past 25 years, narrowing the gap with regional markets. With nearly 10% of the population holding trading accounts, Vietnam’s market is gaining depth and institutional-grade appeal. The market's liquidity is the highest trading volume in the region, surpassing even markets with 70 to 100 years of development.
The bond market in Vietnam has also grown impressively, with a total value of VND2.503 quadrillion ($100 billion), equivalent to 21.7 per cent of 2024 GDP. The Ho Chi Minh City Stock Exchange (HSX) launched a new platform to mark the 25th anniversary of the Vietnamese stock market on July 28.
The SSC frequently conducts direct discussions between regulators, market members, and expert groups to capture real experiences and challenges investors face when participating in the Vietnamese market. The event titled "Upgrading the stock market, expanding capital mobilisation channels for the economy" was organised by Lao Dong newspaper and the MoF on July 30.
The new regulation, effective since June, is another crucial step in attracting international investors to Vietnam's stock market. Over 10 million investor accounts are currently active on Vietnam's stock market, demonstrating growing public participation in the financial market. Bui Hoang Hai, vice chairman of the SSC, affirmed Vietnam's determination to implement solutions to upgrade the stock market.
The anticipated FTSE Russell review in September 2025 will potentially open the door to large-scale, stable, and long-term international investment. With these transformative changes, Vietnam's stock market is set to play a significant role in the country's economic growth and integration into the global financial system.
[1] [2] [3] [4] (Source: Various official reports and press releases)
- The Securities Commission (SSC), in collaboration with the Ministry of Finance (MoF), is working on regulatory amendments to reduce foreign ownership caps and facilitate foreigners opening local currency accounts in Vietnam's stock market, efforts aimed at attracting more foreign investors and strengthening business connections.
- As Vietnam's stock market approaches emerging market status, the SSC is implementing measures to enhance transparency, such as mandatory simultaneous disclosure of information in both Vietnamese and English for listed and public companies, with the aim of attracting foreign institutional investors and improving the business environment.
