Prime Minister Phạm Minh Chính has revealed that he closely monitors the stock market on a daily basis because it reflects the "health" of businesses and the government's management.

"The stock market in Việt Nam holds a prominent position as a high-level market and plays a crucial role in the financial market and our country's socialist-oriented market economy.

"Despite being relatively young in comparison to global counterparts, the Vietnamese stock market has experienced remarkable growth, aligning itself with international standards. It has rapidly closed the gap and achieved significant progress, catching up with leading global markets."

The Prime Minister chaired a conference to discuss the development of the stock market in 2024 at the Government Office on Wednesday in Hà Nội. This conference marked the first time a Prime Minister has taken the lead in such discussions in nearly 25 years.

The conference was attended by Deputy Prime Minister Lê Minh Khái, ministers, heads of various agencies, central government officials, ambassadors, international representatives in Việt Nam, leaders of associations, corporations, domestic and foreign investors, as well as organisations participating in the stock market.

During the conference, the Prime Minister emphasised the government's commitment to protect the legitimate rights and interests of investors and other stakeholders in the stock market. He expressed his desire for the Vietnamese stock market to grow in a healthy, sustainable manner, keeping pace with global trends. The Prime Minister acknowledged the challenges faced by market participants in the past two difficult years and called for collective efforts to accelerate the development of the stock market in 2024 and achieve significant progress in 2025.

To realise these goals, the Prime Minister directed the State Securities Commission (SSC) to promptly implement necessary measures to elevate the Vietnamese stock market from a frontier market to an emerging market by 2025. Special attention must be given to resolving difficulties and obstacles to meet the criteria for the upgrade, with a firm commitment to turn words into action.

He urged a thorough review and suggested amendments to relevant legal regulations to address technical issues and enhance transparency in the stock market. Immediate action was required to remove barriers and create favourable conditions for foreign investors to access the market.

Chính emphasised the need to review and disclose the maximum foreign ownership limits in sectors with certain conditions or restrictions. Simplification of procedures and streamlining of the process for foreign investors to open indirect investment accounts were also highlighted.

Regarding securities companies, the Prime Minister emphasised the importance of corporate restructuring to enhance their management capabilities, risk management and competitiveness in the market. Professional development of permitted services was encouraged, along with the continued growth of a diverse range of securities companies operating under both multi-functional and specialised business models.

The Prime Minister highlighted the necessity of researching and establishing mechanisms to guide, manage and supervise the application of financial technology in securities transactions.

To attract issuers, Chính encouraged various types of businesses to conduct initial public offerings (IPOs) coupled with listings and trading registrations on the stock market. Efforts should be made to attract large-scale enterprises with strong financial positions and good corporate governance to list on the stock market. 

The Prime Minister asked the Ministry of Finance, the SSC, the State Bank of Việt Nam, the Ministry of Planning and Investment, and other relevant ministries and agencies to focus on developing and implementing specific action plans to realise the Stock Market Development Strategy up to 2030.

The Ministry of Finance needs to promptly review and amend existing regulations, especially those related to transparency requirements for business information, rights and responsibilities of market participants such as government regulatory agencies, enterprises, securities companies and investors.

The Ministry of Finance and the SSC are urged to upgrade and build the market infrastructure system to serve the securities market in a modern and digitally advanced manner. They should also enhance the quality of market management and supervision, and create favourable conditions for enterprises, market institutions and investors to participate in the Vietnamese stock market, ensuring a harmonious balance of interests between the state, service providers and investors.

The government leader also pointed out existing limitations, challenges and difficulties in the Vietnamese stock market, particularly in terms of legal framework consistency, price manipulation and securities fraud, accuracy of disclosed information by some public companies, listed companies, and investors, application of technology, especially digital technology in market operations and management, and the incomplete and diverse development of the stock market ecosystem.

According Vũ Thị Chân Phương, Chairwoman of the SSC, the Vietnamese stock market has undergone significant improvements and modernisation. The market structure has been gradually strengthened, expanding from a stock market to include a government bond market and derivatives market.

At its inception on July 28, 2000, the stock market had only two listed companies and six member securities firms. However, by the end of 2023, there were nearly 2,300 listed companies and 82 active securities firms.

The securities business organisations and service providers have witnessed remarkable development in terms of professional expertise, financial capacity, and service quality. They now play a vital role in bridging the gap between investors and businesses.

Trading securities has evolved from requiring investors to physically visit stock exchange centres and complete paper-based transactions to allowing them to trade from anywhere using various smart devices. Investors now have access to a wide range of analysis tools across multiple platforms, surpassing the reliance on electronic boards, she said.

The market has experienced continuous growth in scale and its ability to mobilise capital for businesses. The market capitalisation of stocks has shown positive growth, increasing from 0.22 per cent of GDP in 2000 to 33.52 per cent of GDP in 2010, and reaching 58.1 per cent of GDP in 2023.

According to Ketut Ariadi Kusuma, a Senior Financial Sector Specialist at the World Bank (WB), the WB estimates that upgrading the Vietnamese stock market could attract up to $25 billion in new international investor capital into the Vietnamese bourse by 2030, subject to certain important conditions.

First, for Việt Nam to achieve this, it needs to be upgraded by both international index providers, FTSE Russell and MSCI. The WB acknowledged and supported the SSC's current approach of prioritising the market upgrade.

Second, it is crucial to address issues related to foreign investor ownership limits and continue the process of equitising large state-owned enterprises. This would entail improving information disclosure, facilitating access to stocks that have reached the ownership limit, and most significantly, raising the foreign investor ownership limit, he said.

Third, it is essential to foster a robust global investment environment to enable Việt Nam to benefit from the natural growth of global investment into emerging markets. This growth is estimated to be around 7 per cent annually. VNS