Vietnam is working hard to have its stock market upgraded from frontier status to an emerging market by 2025
Vietnam aims to upgrade its stock market from frontier status to an emerging market by 2025, according to State Securities Commission Chairwoman Vu Thi Chan Phuong. The country’s legal framework, including the 2019 Securities Law, 2020 Investment Law, and 2020 Law on Enterprises, has created optimal investment conditions, facilitated access to English information, and enhanced market transparency. The market has also become more transparent and healthy, with businesses proactively disclosing information in English. The SSC plans to revise legal documents to improve transparency and sustainability. Vietnam is one of Asia’s fastest-growing economies, benefiting from global supply chain diversification and a rising middle class.
Vietnam’s stock market is still classified as a frontier market by MSCI and FTSE Russell, while neighboring countries like Thailand, Indonesia, Malaysia, and the Philippines are considered emerging markets.
To attract foreign investors, Vietnam needs to promote market transparency and provide favorable conditions. If upgraded to an emerging market, billions of USD are expected to pour into Vietnamese stocks each year. Improvements include prefunding requirements and foreign ownership limits, and the State Bank of Vietnam should focus on improving its IT system, diversifying products, and promoting green growth.