Vietnamese securities meet 9/9 criteria for upgrading, about to welcome billion-dollar capital flow?

Vietnamese stock investors are anxiously awaiting the results of the market upgrade from frontier to emerging in early October 2025, hoping to open the door for large international capital flows into Vietnam.

Vietnam's recent efforts to reform and upgrade its stock market have been recognized by FTSE Russell - Photo: QUANG DINH

What does international experience say when the stock market is upgraded?

"Based on the criteria of FTSE Russell (an organization that provides indexes and ranks stock markets globally), the Vietnamese stock market has met 9/9 criteria, and is expected to soon have positive results in this assessment period," said Mr. Nguyen The Minh - Director of individual customer analysis at Yuanta Vietnam Securities.

In that context, the team of experts at Yuanta Securities also reviewed the stock market developments of some countries that were recently upgraded by FTSE Russell, such as Kuwait, Saudi Arabia and Romania. In fact, the reactions of the markets after the upgrade announcement are often quite different.

For example, in Kuwait (2017), after the upgrade announcement, the market fell sharply in the first three months, fluctuating between -5% and -10%. The main reasons were the US Federal Reserve (Fed) raising interest rates and oil price fluctuations.

Next, with Saudi Arabia (2018), the market initially increased strongly, at times reaching +20% thanks to the MSCI upgrade and Aramco IPO expectations.

However, it then fluctuated greatly and fell sharply to -20% when the oil crisis and COVID-19 broke out.

In Romania (2019), after the announcement, the market fell sharply due to the COVID-19 shock, at one point falling by more than 25%. After the official upgrade in 2020, the market recovered strongly, increasing by more than 30%.

"The upgrade effect also often brings positive effects in the short term, but in the long term, the stock market's performance will depend on many other factors. We believe that specific developments also depend on the macro context (monetary policy, oil prices, COVID, politics ) and come from internal factors," Mr. Nguyen The Minh emphasized.

In the case of Vietnam, the positive point in this period is that the Fed will reduce interest rates after a period of maintaining high interest rates, which could be a positive supporting factor for the story of upgrading Vietnamese stocks.

At the same time, the foreign ownership ratio has decreased to 12%, calculated based on the number of shares owned divided by the number of shares in circulation. The main reasons still come from the difference in USD/VND interest rates, the global technology investment wave, the lack of new goods in our stock market, and the room ratio (ownership limit) of foreign investors.

Therefore, the Fed's interest rate cut, along with the wave of IPOs (initial public offerings) of new products and the development of financial products, are the driving forces that will soon attract foreign investors to return to the Vietnamese stock market.

Efforts to meet directly and call for foreign capital to flow into Vietnam

Minister Nguyen Van Thang and the Ministry of Finance delegation recently had a direct working session with the London Stock Exchange - LSE (parent company of FTSE Russell) in the UK.

During the working session, the minister said that recently, the Vietnamese Government has made focused efforts to implement solutions to meet the upgrading criteria of FTSE Russell.

"We have had strong reforms and decisions with the synchronous issuance of many mechanisms and policies that take effect immediately to create the most favorable conditions for foreign investment capital to participate in the Vietnamese stock market," the minister emphasized.

During this working trip, Ms. Vu Thi Chan Phuong - Chairwoman of the Vietnam Securities Commission also worked directly with FTSE Russell to discuss market upgrade issues. The Ministry of Finance organized an Investment Promotion Conference to inform investors in the London financial market about the Vietnamese financial market in the most complete way.

Through the event, Ms. Julia Hoggett - Director of the London Stock Exchange - highly agreed and believed in the development of Vietnamese securities in the coming time, and will continue to promote cooperation to support the issue of upgrading to emerging market status.

She expects there will be further developments and the London Stock Exchange will be an effective "gateway" for the Vietnamese market to connect with many other markets in the world.

Notably, through the meeting, the Vietnam Stock Exchange signed a memorandum of understanding (MOU) with FTSE International Limited (FTSE), officially establishing a strategic partnership to improve capital market infrastructure and promote Vietnam's international integration.

Key proposals on cooperation orientation between Vietnam and the London Stock Exchange in the coming time:

- Perfecting institutions and governance: Strengthening the exchange of experiences in building legal frameworks, market supervision mechanisms, applying international standards on corporate governance, information disclosure and sustainable development (ESG).

- Product development and investment promotion: Diversify securities products (green bonds, sustainable bonds, derivatives). Promote investment, advertise and connect Vietnamese enterprises with international investors, especially in the UK and Europe.

- Improve human resources and technology: Share training experiences, improve financial and securities human resources capacity, apply Fintech, AI, Blockchain...

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Source: https://tuoitre.vn/chung-khoan-viet-dat-9-9-tieu-chi-nang-hang-sap-don-dong-von-ti-do-20250918152437185.htm