Facing mounting economic challenges, the Vietnamese government has embarked on a comprehensive and assertive policy agenda aimed at reshaping capital flows and fostering sustainable growth. This initiative is not just a response to current economic pressures but a strategic move to position Vietnam as a competitive player in the global financial landscape.
Upgrading the Stock Market
On September 12, Prime Minister Pham Minh Chinh approved a strategic plan to upgrade Vietnam’s stock market classification. This initiative is closely tied to the country’s ambition to establish international financial centers in Ho Chi Minh City and Da Nang. The envisioned international financial hubs will feature stock exchanges that meet global standards, offering high-quality listed products, including stocks and bonds. These platforms aim to mobilize capital more efficiently and support both enterprises and the broader economy.
Strategic Roadmap for Stock Market Upgrade
The core goal of the stock market upgrade plan is to develop the stock market into a key medium- and long-term capital mobilization channel. In the near term, Vietnam aims to meet all the criteria for reclassification from “frontier market” to “secondary emerging market” by FTSE Russell in 2025 and maintain that status. Key objectives include resolving prefunding issues, increasing transparency of foreign ownership limits, simplifying account openings for foreign investors, and modernizing trading systems.
In the long run, the plan seeks to achieve “emerging market” status under MSCI and “advanced emerging market” status under FTSE Russell by 2030. Proposed actions include reviewing foreign ownership caps, building a central clearing counterparty (CCP), and enabling same-day trading, among others.
Tax Revisions and Market Transparency
On September 13, the government directed a revision of the Personal Income Tax Law, categorizing profits from gold trading as taxable income. This move aims to enhance market transparency, curb speculation, and reduce the “goldization” of the economy. The urgency stems from instances where the price of SJC gold bars surged past 135 million VND per tael (approximately $5,500), sometimes exceeding global prices by nearly $800, posing significant financial risks.
Addressing Real Estate Price Surges
Alongside gold, real estate prices have soared sharply, especially in Hanoi and Ho Chi Minh City. The rapid increases have far outpaced average incomes, raising fears of asset bubbles and potential bad debt risks in the banking system. These distortions divert speculative money into unproductive areas, skewing the economy’s structure and hindering sustainable growth. By taxing gold profits and tightening control over the real estate market, the government aims to redirect capital flows toward more productive investment avenues.
The Role of Cryptocurrency
Previously, the government issued Resolution 5 to establish the first legal framework for Vietnam’s crypto asset market. This pilot program will run for five years, during which unauthorized crypto trading will be strictly punished, including possible criminal charges. This initiative reflects the government’s commitment to regulating emerging financial technologies while safeguarding the economy from speculative risks.
Redirecting Capital Flows for Broader Economic Impact
These policy actions form an integrated strategy with far-reaching economic implications. Analysts predict that the stock market will become the primary destination for major capital flows. Despite recent corrections after a strong rally, the long-term outlook remains bullish, particularly with the implementation of the upgrade plan. Mirae Asset Vietnam forecasts that the VN-Index could rise to new highs between 1,800 and 2,000 points by the end of this year.
If Vietnam is upgraded by FTSE Russell in the October 2025 review, passive funds tracking FTSE indexes could inject up to $600 million in net purchases in 2026. Total foreign inflows could reach several billion dollars as Vietnam becomes more attractive to emerging market investors.
Attracting Foreign Investment
To attract this capital, the government plans to disclose maximum foreign ownership thresholds clearly and ensure fair access for international investors. Measures to stabilize the foreign exchange market will help mitigate capital flow volatility. In the longer term, legal reforms will aim to raise foreign ownership limits and introduce instruments such as securities lending and short selling.
Sectors Poised for Growth
Mirae Asset highlights specific sectors poised to benefit from the market upgrade, including steel, real estate, banking, and technology. These sectors are expected to lead the market’s recovery, with capital flowing into high-quality stocks.
Conclusion
In summary, this comprehensive policy approach seeks to reorient the economy toward sustainability by reducing reliance on gold and real estate speculation and promoting the stock market as a new growth engine. If effectively implemented, Vietnam could emerge as a regional standout, drawing massive capital flows into equities and delivering long-term benefits for investors and the economy.
As of September 15, the VN-Index had climbed over 7 points to reach 1,674, with strong liquidity on the HoSE exchange. The SJC gold price, meanwhile, fell to 131.1 million VND per tael (approximately $5,300), reflecting the government’s successful efforts to stabilize the market.
With these strategic initiatives, Vietnam is not just navigating current economic challenges but is also laying the groundwork for a more resilient and sustainable economic future.
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