In order to improve quality and open up the ability to attract large-scale, stable and long-term international investment capital flows for the Vietnamese stock market, on July 30, Lao Dong Newspaper in coordination with the Ministry of Finance organized a workshop on "Upgrading the stock market, expanding capital mobilization channels for the economy".
Lao Dong Newspaper respectfully introduces to readers the paper: "Upgrading the Vietnamese stock market, an opportunity to rise up" by Mr. Pham Luu Hung - Chief Economist and Director of SSI Investment Analysis and Consulting Center (SSI Research).
Over the years, the Vietnamese Government has steadfastly pursued the goal of developing the stock market in a sustainable, transparent and efficient manner.
Efforts to reform institutions, perfect the legal framework according to international standards, restructure market pillars, develop institutional investors and diversify financial products have created a solid foundation for the strong transformation of the market.
After 25 years of formation and development, the Vietnamese stock market is getting closer to the milestone of upgrading from a frontier market to an emerging market. This is not only a recognition in terms of institutions and structure, but also a strategic step forward, opening up a series of development opportunities in terms of capital, enterprise quality, market size and national position.
First, increasing demand - attracting large-scale international capital flows
The upgrade will immediately open up opportunities to attract indirect investment flows from global funds, especially index funds (ETFs) and active funds. It is estimated that Vietnam can attract from 3 to 5 billion USD in just the first two years after being upgraded. International institutional investment funds not only improve liquidity but also improve market quality through long-term investment strategies, promote information transparency, evaluate stocks more effectively and minimize fluctuations caused by speculation.
The participation of specialized funds such as quantum funds and hedge funds with complex investment strategies will enrich market structure, promote the development of a modern financial ecosystem.
Second, boost supply - expand scale and increase market representation.
Market upgrading will create momentum for new listing waves from large enterprises, especially in the period of 20262030. State-owned enterprises in the equitization roadmap will also become an attractive source of supply if there is a transparent and effective divestment mechanism. This not only expands the scale but also increases the representation by industry, especially in strategic areas such as technology, telecommunications, healthcare and consumer goods.
For the IPO wave to truly become a driving force for development, we need to synchronize many factors: from a reasonable valuation system, a clear equitization mechanism to loosening listed conditions - especially for technology enterprises with high growth potential.
Third, strengthen national position - improve credit rating
A stock market recognized as "newly floating" will help Vietnam enter the watch list of tens of thousands of global investment funds. This creates a positive chain effect: from investor confidence to the ability to access international capital of the Government and businesses.
Not only stopping at stocks, upgrading also opens up opportunities for the bond and derivatives market, and is a plus point in national credit assessment. A better credit rating will help Vietnam access international loans at lower costs, enhance competitiveness and position in the international arena.
Becoming an emerging market is not the end, but the starting point for a new development journey. There is still a lot of work that we have to do "after upgrading", and this will determine the conversion of the above opportunities into practical results. With a broader vision, not only upgrading according to FTSE Russell standards, but also national credit rating, upgrading according to MSCI standards, will contribute to the development of the capital market as an important channel to provide capital for Vietnam's growth story.
The Vietnamese stock market is facing a historic opportunity - right at the time when the country is the brightest spot on the Asian map of growth, reform and digital transformation. With the market upgrade, it is not only a recognition of the world, but also a commitment to a more developed, modern and sustainable Vietnam.
