Vietnam targets a stock market revolution by 2030
Vietnam is embarking on a strategic journey to transform its capital market and establish itself as a regional financial hub by 2030. The country has identified several key strategic steps to achieve this ambitious goal.
Key Strategic Steps
Capital Market Development
Vietnam is focusing on enhancing its capital markets by promoting the development of corporate bond and equity markets. This initiative could potentially unlock significant new funding, amounting to over $78 billion in a 6-8-year horizon, primarily benefiting the corporate sector. The country is also working towards an Emerging Market upgrade of its stock market to attract more foreign investment.
Strengthening Institutional Investors
The Viet Nam Social Security Fund (VSS), with assets exceeding 10% of GDP, is a key player in this transformation. The fund is now allowed to purchase international bonds, which can improve the domestic bond market's pricing by providing a standard reference price. The World Bank is providing technical assistance to VSS for managing risks associated with a diversified portfolio and working with external asset management companies.
Regulatory Reforms
Vietnam is enhancing its regulatory environment to support transparency and procedural consistency. The focus is on building institutional credibility and aligning investment incentives with environmental, social, and governance (ESG) priorities. The revised legal environment aims to facilitate high-quality investment, crucial for sustainable economic development and deeper integration into global regulatory systems.
Private Sector Empowerment
The government is implementing policies to boost private sector growth, aiming for annual expansion of 10-12%, higher than the national GDP growth target of 8%. Measures like reducing licensing barriers and decentralizing decision-making are intended to streamline business operations and encourage entrepreneurship.
Infrastructure Development
Vietnam is investing heavily in infrastructure, with plans to double its expressway network to 5,000 km by 2030 and accelerate the development of a high-speed North-South railway. Modernization of key ports is also underway to enhance connectivity and facilitate trade.
Conclusion
These strategic steps are designed to enhance Vietnam's capital market efficiency, attract foreign investment, and position the country as a regional financial hub by 2030. The focus on institutional reforms, infrastructure development, and private sector empowerment is crucial for achieving these goals.
Large Vietnamese corporations are preparing for Initial Public Offerings (IPOs) in 2026-2027. Resolution 68 is a major step in empowering the private sector and encouraging more Vietnamese companies to grow into global players. An upgrade of Vietnam's stock market's classification is essential to unlocking long-term global capital flows.
Stock markets in many Asian economies historically outperformed all other asset classes during their high-growth phases. Dang Nguyet Minh, head of research at Dragon Capital, believes that Vietnam will be upgraded to Emerging Market status by FTSE Russell this September. Deputy Minister of Finance Nguyen Duc Chi has declared that Vietnam is taking efforts to earn a stock upgrade.
Vietnam is making bold moves in infrastructure development, including the North-South motorway, high-speed rail, expanded metro systems, and deep-sea ports. Preliminary earnings reports from major firms indicate a brighter picture for the stock market, with strong performances in the banking, logistics, construction, and consumer sectors boosting investor confidence.
Vietnam's economic structure is shifting from relying on foreign capital and labor migration to nurturing domestic growth drivers. Minister of Finance Nguyen Van Thang had a meeting with representatives of FTSE Russell on July 17 to discuss and assess Vietnam's capital markets for a potential reclassification.
To double the size of Vietnam's stock market and reach the government's goal of a stock market worth 120% of GDP by 2030, listed companies must improve in transparency and scale, and the market must become more attractive in terms of performance, governance, and sustainability.
- Vietnam is focusing on strengthening its business sector by attracting foreign investment through the Emerging Market upgrade of its stock market, which is expected to unlock long-term global capital flows.
- A strategic part of Vietnam's journey to becoming a regional financial hub by 2030 involves empowering the private sector, as large Vietnamese corporations are preparing for Initial Public Offerings (IPOs) in 2026-2027 and improving corporate bond and equity markets, which could potentially unlock significant new funding for businesses in a 6-8-year horizon.
