The role of the stock market in private sector development
At the Vietnam Economic Forum 2025, 2026 outlook held on December 16, the discussion focused on clarifying the role of the capital market in mobilizing resources for the private sector, while emphasizing the need to improve capital use efficiency to meet the high economic growth target in the coming period.
Speaking at the forum, Ms. Nguyen Hoai Thu - General Director of Stock Investment, VinaCapital - said that the stock market plays a very important role in mobilizing resources for the development of the private economic sector. However, if we look at current reality, the rate of Vietnamese people participating in the stock market is still low compared to the potential, only at a few per cent of the population, showing that there is still a lot of room for market development.
According to Ms. Nguyen Hoai Thu, compared to Vietnam's average income and economic growth rate, the scale of the stock market as well as the participation of individual investors is still not commensurate. Financial products on the market are still lacking and not really diverse, not meeting the investment needs of many groups of investors, especially individual investors and long-term investors.
Meanwhile, the private enterprise sector, especially enterprises operating in new fields and industries with high growth rates, is in great demand for capital to expand production, business and innovation. If the stock market is developed more fully, transparently and professionally, this will be an effective and sustainable capital mobilization channel for the private sector, thereby reducing over-reliance on bank credit.
Improving capital efficiency to increase market attractiveness
From the perspective of international financial institutions, Dr. Nguyen Ba Hung - Chief Economist of the Asian Development Bank (ADB) said that in order for the capital market to truly promote its role in supporting economic growth, it is necessary to clearly recognize three core issues, in which the most important factor is capital efficiency.
According to Dr. Nguyen Ba Hung, businesses can only attract and use capital effectively when production and business activities generate enough profits to offset capital costs and create added value. If production and business efficiency are low, mobilizing more capital will be difficult to bring sustainable growth. In addition to domestic resources, attracting international capital is important, but for international capital flows to flow strongly, the capital market and the economy must be attractive enough in terms of efficiency and profitability.
Another issue mentioned by Dr. Nguyen Ba Hung is the operational efficiency of the capital market, especially the ability to reduce the cost of connecting capitalists and capital users. The more the market operates effectively, the lower the cost, the more capital is allocated appropriately, thereby improving the overall efficiency of the economy.
Citing specifically, Dr. Nguyen Ba Hung said that Vietnam's ICOR index is currently at about 6, meaning that to create 1 tael of growth, it takes about 6 taels of investment capital. Meanwhile, in some economies such as Korea or China, this index is only about 3. This shows that if capital efficiency is improved, Vietnam can completely achieve higher growth without having to mobilize too much new capital.
From the perspective of the stock market, Dr. Nguyen Ba Hung said that the current valuation also partly reflects the attractiveness of the market. The P/E coefficient of the Vietnamese stock market is currently about 18 times higher than Malaysia, Indonesia or China. To improve the ability to attract capital flows, the key factor is still improving capital efficiency in the entire economy.
According to ADB experts, improving capital efficiency needs to start from the public sector. For public investment, it is necessary to prepare projects better, shorten the time from approval to implementation and put the project into operation soon to contribute to socio-economic growth. The delay not only reduces efficiency but also increases costs due to price inflation.
