Vietnam's Market Upgrade Could Spark Investment Surge
Vietnam is on track to upgrade its market status, potentially attracting a surge in investment. Many funds are eagerly awaiting this change, while the country's economic growth and favorable policies draw international investors.
Vietnam's goal is to secure secondary emerging market status by 2025 with FTSE Russell and meet MSCI's criteria, aiming for advanced emerging market status by 2030. This upgrade could bring significant investment, potentially dozens of times more than current frontier market-tracking funds. The largest capital inflows are expected from institutional investors, attracted by Vietnam's rapid economic growth and supportive government policies.
Recent regulatory changes have made it easier for foreign investors to enter the stock market. Circular 25/2025 simplified the process of opening payment accounts, while Circular 03/2025 and Circular 25/2025 facilitated indirect investment. The Ministry of Finance's Decree 245/2025 further strengthened transparency and investor protection. Despite these improvements, foreign investors have been net sellers since August, totaling over VND86 trillion ($3.26 billion) in the first nine months. However, this trend is expected to reverse in the fourth quarter.
Vietnam's market status upgrade could significantly boost investment, with institutional investors ready to enter the stock market. Recent regulatory changes have made it easier for foreign investors to participate, and the country's strong economic growth remains an attraction. Despite recent net selling, foreign capital inflows are predicted to improve in the coming months.
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