According to Ms. Ta Thanh Binh, Vietnam has basically met the criteria to be upgraded from a frontier market to an emerging market according to FTSE standards.

The stock market has officially entered 2025 with many expectations. 2025 is a year of important milestones, the final year of the socio-economic development plan for the period 2021-2025, and also the 80th anniversary of the establishment of the financial sector and 25 years of the stock market operation. The Ministry of Finance said it will continue to implement synchronous solutions to develop the market in a stable, transparent and sustainable manner. In particular, striving to upgrade to emerging market status will not only help attract capital for the stock market, but this event will also help enhance Vietnam’s position, contributing to bringing Vietnam into a new era. 

Speaking in the Finance Street Talk Show on VTV8, Ms. Ta Thanh Binh, General Director of Vietnam Securities Depository and Clearing Corporation (VSDC), one of the market operators, playing an important role directly in the process of promoting the upgrading of Vietnam’s stock market, said that up to now, Vietnam has basically achieved the criteria to be upgraded from a frontier market to an emerging market according to FTSE Russell standards and expects that FTSE this March will have objective and positive assessments of the solutions that Vietnam has implemented, so that by the September 2025 review, Vietnam’s stock market can be upgraded as expected by investors.

Editor Mui Khanh Ly: Although still facing difficulties and challenges, the Vietnamese stock market has had positive and stable growth in recent times. How do you evaluate this result?

Ms. Ta Thanh Binh:  Assessing the stock market situation in the recent past, we can see that, in terms of macroeconomics in 2024, the economy has had relatively stable growth thanks to the Government’s synchronous policies and especially thanks to the flexible monetary policy, supporting economic growth. For example, the CPI in 2024 increased by 3.66%, meeting the target set by the National Assembly, GDP growth reached 7.09% with the growth rate of the following quarter higher than the previous quarter.

As for the stock market in recent times, it seems that the general sentiment of investors is that the stock market’s performance has not yet reflected the growth of the macro economy as I just shared. However, if we look at the important indicators of the market, we still see signs of relatively stable and sustainable growth. For example, the VN-Index increased by 12%, the stock market capitalization increased by 19.3%, equivalent to 69.3% of GDP. Meanwhile, the liquidity of the stock market reached over 21,000 billion VND/session, an increase of 20.4% compared to the average in 2023. In particular, the corporate bond market has recovered positively, the total value of issued bonds increased by 438,531 billion VND, equivalent to an increase of 32% compared to 2023 with many improvements in quality. And we consider this a relatively positive signal.

Of course, in reality, investors still expect the market to have a relatively breakthrough growth, especially when the market liquidity has not yet broken through to a high level. In particular, foreign investors have sold relatively strongly in the stock market last year with a figure of over 90,000 billion VND, 4 times higher than the previous year. Thus, it can be seen that the development of the stock market has also been affected by objective factors from the outside. 

We see in the context of gold prices, digital currency prices… having strong fluctuations, along with the unpredictable policies of US President Donald Trump, making the stock markets more unpredictable. However, as I just shared, the main indexes of the Vietnamese stock market still recorded relatively positive growth, as well as the number of investors in the market in the past year has had good growth, showing the increasing interest of investors in the stock market.

Editor Mui Khanh Ly: So can you share more about how the current investor landscape in the stock market has changed?

Ms. Ta Thanh Binh:  The growth of investors is considered a very positive factor. By the end of 2024, we had reached about 9.3 million investor accounts, an increase of 27.5% compared to the end of 2023. And in just over the first month of 2025, the number of newly opened investor accounts was still over 110,000 accounts, showing that this number continues to grow relatively sustainably.

However, we see that the proportion of individual investors still accounts for the majority of over 99% and the number of institutional investors is still relatively low compared to the expectations of the management agency. And in the coming time, in the stock market development strategy, the State Securities Commission has also proposed very clear solutions on restructuring the investor structure to increase the number of institutional investors participating in the Vietnamese stock market.

Editor Mui Khanh Ly: It is known that the Vietnam Securities Depository and Clearing Corporation (VSDC) is one of the market operators, playing an important role directly in the process of promoting market upgrading. Can you share more about the results achieved and how foreign investors are currently interested in the Vietnamese market?

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Ms. Ta Thanh Binh:  Current data shows that the number of foreign investors in the Vietnamese stock market is only over 41,000 foreign investors, accounting for only 0.57% of the total number of investors in general, but owning up to 7.35% of the total value of securities registered at VSDC.

And as I shared, in 2024 we witnessed a fairly strong net selling movement by foreign investors, over VND 90,000 billion. However, if we look at the number of securities held by foreign investors as well as the value of the securities portfolio held by foreign investors, there has been growth. Specifically, as of December 31, 2024, foreign investors owned more than 28.2 billion of all types of securities (equivalent to a value of more than VND 323,531 billion at par value, accounting for 7.35% of the total value of securities registered at VSDC). Thus, compared to December 31, 2023, the number of securities held increased by more than 1.1 billion securities of all types (equivalent to 4.17%), and the value of securities held increased by about VND 10,302 billion (equivalent to 3.29%) at par value.

Thus, we still see a certain trust and growth value of foreign investors in the Vietnamese stock market, not simply net selling activities. In particular, last year, the Ministry of Finance issued Circular 68, which includes regulations on the solution that we still call “non-prefunding”, related to allowing foreign investors to place orders to buy securities without having to have money at the time of placing the order. Up to now, we have had about 3 months of applying Circular 68. We have also surveyed a number of large securities companies, where many foreign investors open trading accounts, and the initial results are relatively positive. 

There have been over 1,200 foreign institutional investors registered to apply this new mechanism at securities companies and the transaction value of these investors has also accounted for 11.16% of the total transaction value of foreign investors in general. We believe that in a very short period of time when applying this new policy, achieving such results is a quite positive signal from foreign investors.

In addition, according to the new mechanism in Circular 68, in case foreign investors cannot deposit money to pay for their transactions on time, the securities company will be the one to take responsibility for this payment. In fact, in the past three months of operation, there have been cases where foreign investors had to transfer payment obligations to the securities company, however, all of these cases are within the previously planned handling process. And this shows that the risk control mechanism as well as the new payment mechanism and process that have been prescribed are relatively suitable for practice and the ability to control risks is suitable for the requirements.

Editor Mui Khanh Ly: Entering 2025, the stock market is expected to make a breakthrough in both scale and quality. In your opinion, what are the factors that will help the stock market achieve these expectations?

Ms. Ta Thanh Binh:  I believe that 2025 will be a year with many positive highlights for the Vietnamese stock market. The most important reason is the economic recovery thanks to the continued drastic solutions from the Government in managing the macro economy. As for the stock market, 2024 saw positive growth, and 2025 will continue to have important highlights.

Firstly, the upgrade story, we basically assess that we have achieved the criteria required by FTSE Russell. We just need time for the credit rating agency to assess the ability to apply those policies in the Vietnamese market and how they are received by foreign investors and organizations. And especially, in 2025, the management agency is very determined in requiring the operation of the KRX information technology system for the stock market. We also expect that with the operation of this KRX system, investors as well as securities companies and market members will have more opportunities to deploy new products in the stock market and thereby support the growth and liquidity of the stock market more strongly than in 2024.

In addition, the amended Securities Law has just been issued and in the near future, the Government will continue to issue a Decree amending Decree 155 guiding securities, which will include many new mechanisms and policies to support quality businesses to increase and promote their participation in the securities market. This is very important when the market can welcome new quality products on the market. As for the derivatives market, the management agency’s plan is to soon deploy a number of new products on the derivatives market to diversify the products on the securities market.

Editor Mui Khanh Ly: If we talk specifically about upgrading, in your opinion, can the expectation of upgrading the Vietnamese stock market become a reality in 2025?

Ms. Ta Thanh Binh:  From the perspective of a market operator, we have also coordinated very closely with many working sessions with management agencies, as well as major foreign investors, especially the credit rating agency FTSE Russell. Up to now, we assess that Vietnam has basically met the criteria to be upgraded from a frontier market to an emerging market according to FTSE standards, and thus we assess that the prospect of the Vietnamese stock market being upgraded in 2025 is very positive. Therefore, we also expect that FTSE in the review period in March will have objective and positive assessments and views on the solutions that we have implemented as I have shared, so that by September 2025, they can evaluate and upgrade the Vietnamese stock market as expected by investors.

Editor Mui Khanh Ly: In addition, in its role and tasks, what solutions will VSDC have to promote the development of the stock market in 2025, as well as contribute to achieving the market development goals by 2030 approved by the Government?

Ms. Ta Thanh Binh:  With VSDC, we are also very aware of our role in providing registration, depository and payment services in the Vietnamese stock market, so the solutions that VSDC offers will also be important solutions to overcome difficulties in meeting the FTSE upgrading criteria. As I have shared, VSDC is the unit implementing the “Non Prefunding” solution that allows foreign investors to conduct transactions according to FTSE criteria. 

However, that is just a starting point. In the long term, if we look at the MSCI upgrading criteria, implementing a CCP payment mechanism will be a more important and long-term solution. Recently, the amended Securities Law has also allowed the establishment of a legal framework for VSDC to establish a subsidiary to be able to implement this CCP business in accordance with international practices. We are also rushing to implement this project according to the given schedule.

In addition, through the process of working with foreign investors, we are currently implementing another solution to support foreign investors to participate in the Vietnamese stock market more conveniently. That is, we will upgrade the existing electronic communication portal at VSDC to allow securities companies and custodian banks to exchange information related to receiving orders and transactions of foreign investors in a unified manner and ensure security and speed compared to the manual methods they are currently implementing such as via email or phone… to confirm orders of foreign investors. Regarding this issue, we are urgently implementing according to the requirements of the management agency and are expected to be completed by March 2025 and will serve investors. 

In addition, to implement one of the very important solutions as I mentioned about the restructuring of the investor base in the stock market development strategy until 2030, it will promote institutional investors, especially foreign investors and organizations to participate in the Vietnamese stock market. Under the investment fund mechanism, in 2025, VSDC will immediately implement the upgrading of services provided to investment funds at VSDC. We expect that this fund service upgrade will support investment funds, especially foreign investment funds, to catch the wave when the stock market is upgraded. Those are the plans in 2025 that we expect to implement immediately to be able to serve the activities of the Vietnamese stock market.