Vietnam's stock market upgraded and perspective from the billion-dollar "sharks"

(Dan Tri) - Billion-dollar foreign funds such as Dragon Capital and VinaCapital all expressed positive views on the news of the stock being upgraded. However, VinaCapital said there are some issues that need improvement.

The first step in the long journey of capital markets

FTSE Russell announced on October 8 that Vietnam's stock market has met all the official criteria and has been upgraded from a frontier market to a secondary emerging market. The expected effective date for the upgrade is September 21, 2026, after a mid-term review in March 2026.

Billion-dollar foreign fund Dragon Capital assessed this as an important milestone, recognizing the achievements of Vietnam's decisive and synchronous reform process, contributing to enhancing the country's position on the global investment map.

In a short period of time, Vietnam's management agencies have implemented institutional reform measures and improved infrastructure, strengthened the legal framework, and approached international standards.

However, the fund said upgrading to secondary emerging market status is just the beginning of a long-term journey for Vietnam's capital market, aiming to achieve FTSE Advanced EM and MSCI emerging market status by 2030.

The upgrade decision was announced in the context that Vietnam continues to record one of the highest economic growth rates in the world: GDP in the first 9 months reached 7.85%, with the third quarter alone increasing by 8.23%. Based on the positive macro growth momentum, Dragon Capital forecasts corporate profits to increase by 21% this year and continue to increase by 17% next year.

Since the beginning of the year, the VN-Index has increased by 28.3% (in USD terms) with an average trading value of over USD 2 billion per day. With a solid foundation and new momentum from the upgrade, the Vietnamese market is expected to enter a new acceleration phase, reinforced by many large initial public offerings (IPOs) with an expected scale of over USD 40 billion in the period 2026-2028.

Many foreign funds positively evaluated the information about the stock being upgraded (Photo: Dang Duc).

Some issues need to be improved

Billion-dollar foreign fund VinaCapital believes that market management agencies in Vietnam can proactively come up with solutions to help Vietnam be upgraded in September 2026 as planned.

Appreciating Vietnam’s efforts, the fund acknowledged that over the past three years, the stock market has witnessed a significant net foreign capital withdrawal, amounting to 8.5 billion USD. However, this upgrade will be a turning point, opening up opportunities for the market to attract foreign capital from investment funds focusing on emerging markets.

Also stating that upgrading is not the final goal but a new starting step, VinaCapital believes that there are still many urgent requirements and challenges for further development to reach the goal of expanding the scale of the Vietnamese stock market to 120% of GDP by 2030, compared to the current level of 75% of GDP.

However, the fund pointed out that the challenge lies in maintaining and strengthening the position in the long term. Vietnam needs to carry out more comprehensive reforms to deepen, modernize and sustain the development of the capital market.

One of these is the relaxation of foreign ownership limits, which is an important step to improve market access. The development of a legal framework for exchange rate hedging instruments is also essential, helping long-term institutional investors manage currency risk more effectively when investing in emerging markets.

In addition, issues such as the lack of detailed reporting in English and standardization of market data also need to be improved to help increase foreign investors' interest.

In addition, the market needs to diversify its sectors and have more high-quality IPOs. Currently, the market is still heavily dependent on two key sectors: finance (37%) and real estate (19%). A more diversified sector structure will help the market better reflect the economy in general and reduce over-dependence on these two sectors.

On the other hand, the above foreign "sharks" believe that the upcoming wave of IPOs will boost market capitalization and help rebalance the industry structure of the stock market. In the long term, a diversified market will promote sustainable growth, strengthen investor confidence and support the continued development of the capital market.

Source: https://dantri.com.vn/kinh-doanh/chung-khoan-viet-nam-duoc-nang-hang-va-goc-nhin-tu-dan-ca-map-ty-usd-20251008144547518.htm