Vietnamese Gov’t remains steadfast in upgrading stock market to emerging status by 2025

The Vietnamese Government remains committed to upgrading its stock market from the current frontier market status to an emerging one by 2025.

Deputy Minister of Finance Nguyen Duc Chi at the meeting. Photo: Nhat Bac

Deputy Minister of Finance (MoF) Nguyen Duc Chi shared this view during a press briefing on February 2.

“Vietnam’s stock market has reached a certain point that needs a breakthrough for development,” Chi said, referring to the upgrade to an emerging market status based on the criteria set by international stock market rating organizations.

With the objective being mentioned in the stock market development strategy until 2030, Chi noted the MoF is working with relevant ministries and sectors to achieve it.

Among the key tasks, Chi noted the need to address the issue of requiring pre-transaction deposits from investors, especially foreign investors.

Currently, the regulation mandates a 100% deposit before transactions can take place, which is seen as a barrier to market upgrading.

"The Ministry of Finance has closely coordinated with international stock market rating organizations, and we will propose a workable and effective solution to handle this issue in 2024, in line with the recommendations of international stock market rating organizations. We consider this matter crucial and pivotal for 2024," emphasized Chi.

Meanwhile, Chi mentioned the goal of meeting the transparency requirements of international stock market rating organizations regarding the ownership ratios of foreign investors in companies listed on the stock market.

"We have worked closely with the Ministry of Planning and Investment to implement and disclose this information as clearly and comprehensively as possible in both Vietnamese and English on the ministry's platforms. The Ministry of Finance will regulate the requirements for listed companies to update and transparently disclose information on the ownership ratio of foreign investors in listed companies to foreign investors in the market," Chi said.

Investors at a securities company in Hanoi. Photo: Vietnamplus

He also highlighted the issue of ensuring transparency of information from listed companies on the stock market in both Vietnamese and English. In this regard, Chi expected the MoF to implement this requirement in the first half of 2024, requesting listed companies to take appropriate steps to comply with this regulation. By the end of 2024, basic listed companies must publish their information following market regulations in both languages.

Besides, the Government is committed to making the new securities trading system operational in the market and ensuring compliance with the clearing and settlement requirements of the stock market.

"These tasks, while reflected in legal documents, are also practical implementations in the market. Foreign investors and international rating organizations will review and assess the market to upgrade it according to the timetable and goals of the market development strategy. Another aspect is that, despite the importance of the goal, the Ministry of Finance must ensure risk management, especially systemic risks, and ensure the stable, safe, and sustainable operation of the market," emphasized Chi.

According to the approved stock market development strategy until 2030, the size of the market capitalization is expected to reach 100% of GDP by 2025 and 120% of GDP by 2030, almost doubling the current value.

The target for the number of securities trading accounts for investors in the market is set at 9 million accounts in the next two years and 11 million accounts by 2030, focusing on developing accounts for institutional and professional investors and attracting the participation of foreign investors. The market's bond debt is projected to reach at least  47% of GDP by 2025, including a minimum of 20% for corporate bond debt, and reach a minimum of 58% of GDP by 2030.

By the end of 2023, the total market capitalization is expected to surpass $240 billion, equivalent to 56.4% of GDP, with the Ho Chi Minh Stock Exchange (HoSE) alone accounting for $186 billion.