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In a recent press release, the Ministry of Finance said upgrading the stock market is one of Vietnam’s major goals and this goal was included in the Master Project on Restructuring the Stock Market and the Insurance Market until 2020 with Orientation to 2025 and the draft Strategy on Stock Market Development until 2030, which aims to upgrade the stock market to an emerging market by 2025.

Toward this goal, Vietnam has adopted several legal documents and implemented various measures. The 2019 Securities Law, the 2020 Investment Law, the 2020 Enterprise Law and many other legal documents ensure the ownership proportion of foreign investors, create favorable conditions for investment capital flow, information access, registration and account opening for investors and compensation and payment on the stock market, and provide new financial tools to diversify investment products.

Vietnamese management agencies have worked closely with MSCI and the Financial Times Stock Exchange (FTSE), two organizations that specialize in the assessment, classification, and ranking of the stock market, to update the development of the stock market and make prompt market solutions. The State Securities Commission of Vietnam (SSC) recently worked with the World Bank and FTSE Russell to find ways to solves problems in upgrading Vietnam’s stock market.

The Commission has also been working with ministries, sectors, associations, market members, investors, the State Bank of Vietnam, and the Ministry of Planning and Investment to fix problems like the foreign ownership rate and amend certain regulations governing the foreign exchange market.

Management agencies are devising guidance on implementing the 2020 Investment Law, focusing on stipulations concerning sectors, jobs, conditions for market access for foreign investors, and transparency of foreign ownership rates to ensure that investors get sufficient information in a timely manner.

Economists say upgrading to an emerging stock market will help Vietnam attract foreign capital, especially from passive investment funds. Mr. Zafer Mustafaoglu, Director of the World Bank’s Department of Finance, Competition and Innovation in East Asia-Pacific, said upgrading to an emerging market will raise the market’s status and demonstrate the strong improvement in the market. The upgrade could bring in another 10 billion USD of new indirect investment for Vietnam, an additional 2-5 billion USD in the first year.