A surge of large capital inflows into Vietnam’s stock market over the past two months has not only signaled growing investor confidence but also highlighted the market’s appeal as a key investment channel. Economic reform and an ambition for an upgrade in market classification are propelling the country's capital market into a new phase of growth.

Robust signals from Vietnam’s economic barometer

Despite notable market volatility, the VN-Index has repeatedly hit new peaks in recent weeks, supported by significant capital inflows. Daily trading sessions valued at USD 2–3 billion have become common, while individual stocks have witnessed hundreds of millions of dollars in trading volume. Many of these gains are linked to expectations of economic reform and national growth prospects.

A clear example occurred during trading sessions on August 18 and 19, when infrastructure construction stocks surged, hitting their daily limits with high liquidity. This momentum was largely fueled by expectations of accelerated public investment disbursement. On August 19 alone, 250 projects were inaugurated or launched across the country, representing a total investment of VND 1.28 quadrillion (approximately USD 50.2 billion). According to the Ministry of Construction, these projects are expected to contribute more than 18% of GDP in 2025 and over 20% in the following years.

In a related development, Military Commercial Joint Stock Bank (MB) announced a strategic partnership with Dunamu, the operator of South Korea’s largest digital asset exchange, Upbit. This news boosted MBB shares, especially amid expectations that a pilot regulation for digital asset exchanges will be issued in August or September 2025. The upcoming regulation is set to support capital attraction for future international financial centers. Additionally, a policy taking effect on October 1, 2025, allowing credit institutions to take over underperforming commercial banks with a 50% reduction in mandatory reserves, is expected to further benefit MBB.

At the same time, initial public offerings (IPOs) of subsidiaries have become strong drivers for bank stocks like TCB (Techcombank) and VPB (VPBank). Techcombank has repeatedly indicated plans for the IPO of Techcom Securities (TCBS), with TCB shares climbing to new highs since May 2025. The offering is currently priced significantly above TCBS’s book value. VPBank Securities (VPBankS) is also preparing to seek shareholder approval to initiate its IPO.

Beyond enriching the stock market, these IPOs help diversify shareholder structures and expand the reach of corporate ecosystems.

Reform as a growth engine

The bustling energy at construction sites, the return of large-scale IPOs, and investors’ enthusiasm for new developments are all reflected in the stock market, often referred to as the barometer of the economy. More than just a few isolated stock gains, many experts believe the capital market is preparing for a qualitative transformation.

Internationally, Shengyong Goh, Head of Southeast Asia Research at China International Capital Corporation (CICC), remarked that Vietnam is among the world’s fastest-growing economies. He attributed this not only to growth rates but also to fundamental reforms known as “Doi Moi 2.0.”

According to Goh, Vietnam’s ability to negotiate a 20% reciprocal tax agreement with the Trump administration, amid global confusion over U.S. tax policy, stands out as a strategic achievement.

He also praised Vietnam’s broad and synchronized reform efforts, including administrative consolidation, governance improvements, streamlining procedures, and support for the private sector under Resolution 68-NQ/TW. These reforms have expanded growth capacity while creating a stronger legal foundation for a sustainable capital market.

Pham Luu Hung, Chief Economist at SSI Securities Corporation, emphasized that achieving double-digit economic growth will require investment equivalent to 30–40% of GDP. In past years, Vietnam’s GDP growth has relied heavily on the banking sector. Hung argues that going forward, it will be essential to expand and develop a strong capital market.

He noted that the government’s initiative to build an international financial center will create mechanisms to access capital more effectively and should be rapidly advanced.

Hung also highlighted that ongoing revisions to Vietnam’s Investment Law, currently open for public feedback as of mid-August, could further catalyze capital market development. These include simplifying investment procedures for both inbound and outbound investors. Law No. 90/2025/QH15, which amends the Public-Private Partnership (PPP) Investment Law, also allows project enterprises to issue and list private bonds immediately after issuance.

Anticipating a qualitative leap

Vietnam’s stock market is expected to receive an FTSE classification review in early October 2025, with high hopes of being upgraded to an emerging market after years on the watch list. Beyond stock market status, Vietnam aims to achieve an “Investment Grade” credit rating by 2030. Reaching this milestone would enable both the government and private sector to access international capital markets at reduced costs, potentially lowering borrowing costs by 2–2.5 percentage points.

Experts at VNDirect suggest this could accelerate major infrastructure projects such as the North-South high-speed railway, cross-border rail links to China, the North-South expressway, and metropolitan metro lines. To meet these goals, Vietnam must improve transparency, strengthen corporate governance, bolster the banking system, and accelerate its stock market’s upgrade to emerging market status under FTSE and MSCI by 2027. This progress is key to achieving the 2030 credit rating objective.

Hung emphasized that reforms must go beyond opening doors; the entire market “house” must be renovated and upgraded. Enhancing the quality of listed stocks, improving corporate governance, expediting IPOs, divestment, and information transparency have been long-standing goals. A vibrant secondary market and the revival of IPOs suggest a promising increase in quality investment products.

From market movements to regulatory reforms, Vietnam’s capital market appears poised for a major leap in quality. Capital inflows are no longer simply about volume but are increasingly driven by real reform expectations - positioning the capital market for long-term, sustainable development.

Target: At least 20 major firms in global value chains by 2030

As outlined in the first Party Congress Resolution of the Ministry of Finance for the 2025–2030 term, specific goals have been set to improve the business environment, boost national competitiveness, and promote enterprise development.

For the private sector, Vietnam aims to have 2 million operating businesses by 2030, with a business density of 20 per 1,000 people, and at least 20 major firms participating in global value chains. The private economy is expected to grow at 10–12% annually, outpacing overall GDP growth.

For state-owned enterprises (SOEs), the goal is to have at least 25 SOEs with equity or market capitalization of over USD 1 billion, including 10 surpassing USD 5 billion, and 30 SOEs with annual revenue exceeding USD 1 billion by 2030.

For foreign-invested enterprises, Vietnam targets USD 200–300 billion in registered capital and USD 150–200 billion in realized capital between 2026 and 2030. The local content ratio is expected to exceed 40% by 2030.

PV