The Ho Chi Minh Stock Exchange in Ho Chi Minh City. (Photo: VNA)

Hanoi - Prime Minister Pham Minh Chinh has instructed the Ministry of Finance, State Bank of Vietnam and the Ministry of Planning and Investment to address obstacles in relevant sectors for upgrading the stock market from frontier to emerging status.

On February 15, 2024 the Prime Minister signed Directive 06/CT-TTg on accelerating key tasks after the Lunar New Year holiday, including requirements to implement measures to meet the criteria for upgrading the stock market.

In Official Dispatch 1360/CD-TTg of December 13, 2023, the government leader had requested relevant agencies to promote the safe, transparent, efficient and sustainable development of the stock market.

The dispatch stated that the stock market has maintained stable and safe operations, becoming more substantial, efficient and transparent. It has gradually restored order and discipline, continuing to strengthen investor confidence both domestically and internationally. Efforts have been made to attract investment and promote the image of the Vietnamese stock market, with the goal of upgrading it from frontier to emerging status.

However, it is necessary to urgently implement measures to enhance the quality of goods in the stock market, and improve the efficiency of market participants, securities companies and fund management companies. Diversification of the investor base is needed to attract the participation of institutional investors, professional investors and investment funds, while actively providing information and financial-securities knowledge training for individual investors.

In the Stock Market Development Strategy towards 2030, approved by Deputy Prime Minister Le Minh Khai on December 29, 2023, the government aims to achieve a market capitalisation of stocks equivalent to 100 per cent of GDP by 2025 and 120 per cent of GDP by 2030. The number of securities trading accounts is expected to reach 9 million by 2025 and 11 million by 2030.

The market debt of bonds should reach at least 47 per cent of GDP, with corporate bond debt accounting for at least 20 per cent of GDP, by 2025. By 2030, it aims to reach at least 58 per cent of GDP, with corporate bond debt accounting for at least 25 per cent of GDP. The derivatives market is projected to grow at an average rate of 20 to 30 per cent annually in 2021-2030.

The strategy strives to upgrade the Vietnamese stock market from a frontier market to an emerging market by 2025, according to the criteria of international organisations for stock market classification.