Vietnam Deputy PM requests measures to upgrade stock market status

Vietnam’s Deputy Prime Minister Ho Duc Phoc on Saturday tasked the Ministry of Finance with deploying necessary solutions to meet international criteria for upgrading the country’s stock market status.

In a notice released by the Government Office, Phoc instructed relevant agencies to focus on resolving outstanding obstacles to meet the upgrade criteria, saying implementation outcomes should be reported in July 2025.

The agencies were requested to promptly engage with FTSE Russell, a London-based global equity index provider, and with investment institutions to clarify the timing, participants, and agenda for meetings with government officials, and to submit reports and proposals per regulations.

The agencies were also asked to finalize the draft decree amending and supplementing certain provisions of the Government’s Decree No. 155/2020/ND-CP detailing the implementation of certain provisions of the Law on Securities, with a report due by Thursday, July 3.

The State Bank of Vietnam, the Ministry of Finance, the State Securities Commission - Vietnam's stock market watchdog - and relevant agencies, will review recommendations and proposals put forward by the finance ministry in the aforementioned document.

The Deputy Prime Minister also asked for continued efforts to review legal documents and necessary actions to support the upgrade of Vietnam’s stock market.

The goal is to facilitate easier access for foreign investors, attract greater inflows of foreign portfolio investment, and accelerate the upgrade of Vietnam’s stock market from frontier to emerging market status.

The Government Office requested that any issues beyond the jurisdiction of relevant agencies be promptly reported to higher authorities for resolution, with the process to be completed by July 15.

Billions of U.S. dollar in expected capital inflows

The upgrade of Vietnam’s stock market was a key focus at the latest session of the National Assembly – the country’s legislature, which wrapped up last Friday.

A resolution adopted at the meeting last Friday emphasized the need to develop capital-raising channels through the capital market. It stressed that in 2025, all necessary conditions must be prepared to upgrade the market to emerging status.

Analysts at VPS Securities JSC, a leading broker in Vietnam, said there is a solid basis for Vietnam’s stock market to be upgraded by FTSE Russell this October.

Once upgraded, they said, Vietnam’s stock market could draw about $800 million from passive investors tracking FTSE indices, along with an additional $2 billion from those following other benchmarks.

The upgrade is also expected to prompt greater participation from active funds, potentially bringing in $4-6 billion. These inflows would boost market liquidity, improve trading efficiency and stability, and help bring stock valuations closer to fundamentals.

It would also lift the weighting of Vietnamese equities in global portfolios, serving as a catalyst for medium- and long-term growth in the stock market.

In the long term, the upgrade would drive the professionalization of the entire market, raise corporate governance standards, and improve information quality, thereby strengthening confidence of both domestic and foreign investors.

At the same time, foreign capital inflows are hoped to bolster macroeconomic stability, support exchange rate management, and accelerate further reforms such as the introduction of new financial instruments.

Amid a positive macroeconomic backdrop and ongoing policy support, the market upgrade is not only expected to unlock capital inflows but also mark a turning point that elevates Vietnam’s stock market on the regional and global financial map.

It presents major opportunities for both individual and institutional investors over the medium and long term.