As the Vietnamese Government targets stock market capitalization equivalent to 120 percent of GDP by 2028, the country’s stock market is expected to play a larger role as a medium- and long-term capital channel for the economy, gradually reducing dependence on bank credit. Market upgrade prospects and a new wave of IPOs are seen as twin drivers supporting this ambition.
VN-Index continues setting new highs
Despite strong volatility in global financial markets caused by geopolitical tensions and concerns over prolonged high interest rates, Vietnam’s stock market has continued to outperform regional trends, repeatedly reaching record highs in May 2026.
Although investors are often influenced by the “Sell in May and go away” effect, the VN-Index has set four all-time highs since the beginning of the month, reaching 1,927.94 points during the May 18 trading session.
According to analysts, the strongest catalyst came from FTSE Russell’s confirmation that Vietnam remains on track for an upgrade to Secondary Emerging Market status, expected to take effect on September 21, 2026.
In contrast to the market’s positive performance, foreign investors have continued aggressive net selling. Since the beginning of 2026, foreign investors have recorded net sales of nearly VND53 trillion, equivalent to approximately US$2.1 billion across the market.
Market liquidity has also declined significantly. During sessions when the VN-Index reached new highs, trading value fluctuated around VND20 trillion (US$759 million) to VND30 trillion (US$1.1 billion) per session, while most other sessions recorded only VND18 trillion (US$683 million) to VND22 trillion (US$834 million). These figures remain far below the highly active period in late July and early August 2025, when market liquidity reached VND70 trillion (US$2.7 billion) to VND80 trillion (US$3 billion) per session.
Mr. Nguyen The Minh, Director of Research and Individual Client Development at ABS Securities, said that foreign capital outflows mainly stem from global market fluctuations.
According to him, yields on 30-year US Treasury bonds have surpassed their 2008 peak, while yields on 10-year Japanese Government Bonds have exceeded 2 percent. As a result, low-cost borrowing strategies to invest in emerging and frontier markets are becoming less attractive, causing capital to flow back to developed markets.
Nevertheless, Vietnam’s market upgrade prospects are still expected to generate substantial new inflows.
He estimated that after the FTSE Russell upgrade, Vietnam could attract between US$1 billion and US$1.5 billion from exchange-traded funds (ETFs), with disbursements taking place in multiple phases. Active investment funds could inject an additional US$4 billion to US$6 billion.
Looking further ahead, Vietnam aims to join the emerging markets index of MSCI, the US-based index provider widely used as a benchmark by major global investment funds.
Mr. Nguyen The Minh said that Vietnam could be added to MSCI’s watchlist for market upgrade consideration by late 2026. Between 2027 and 2028, if officially upgraded, Vietnam’s stock market could attract an additional US$12 billion to US$20 billion in new capital inflows.
Expectations for a third IPO wave
Alongside the market upgrade story, investors are also anticipating a new IPO (Initial Public Offering) wave aimed at expanding market capitalization and improving the quality of listed companies.
Recent developments suggest that the IPO market has started to regain momentum. Following notable IPO deals by securities companies in 2025, including VPBS, VPS and TCBS, the market is now seeing reports related to the IPO plans of Dien May XANH.
According to Bloomberg, Bao Tin Manh Hai Gold Company is expected to launch its IPO in late 2026, as firms including LPBS and KAFI continue to pursue stock market listings.
Hoang Viet Anh, Chief Executive Officer of LPBS Securities, said that Vietnam’s stock market is entering its third IPO wave, following two major cycles during 2006-2007 and 2016-2017.
Vietnam is well positioned for a third IPO wave in the 2025-2030 period, with potential fundraising estimated at VND500 trillion (US$19 billion) to VND600 trillion (US$23 billion) if it matches 3-5 percent of GDP as seen in earlier cycles, Mr. Hoang Viet Anh said.
From a longer-term perspective, Mr. Nguyen Minh Tuan, Chief Executive Officer of AFA Capital, noted that the Government has advanced its target for stock market capitalization to reach 120 percent of GDP by 2028, two years earlier than previously planned.
Based on projections that Vietnam’s GDP could reach around US$700 billion, equivalent to more than VND18.4 quadrillion by 2028, total stock market capitalization would need to rise to approximately US$840 billion, or nearly VND22.1 quadrillion (US$838 billion).
To achieve this goal, besides rising stock values, the market will need many more newly listed companies to provide additional quality investment products, Mr. Nguyen Minh Tuan emphasized.
Strengthening the capital market
Experts believe that for the stock market to truly become a major capital channel for the economy, Vietnam needs more large-scale listed companies with transparent operations and strong corporate governance.
This would also create a stronger foundation for attracting institutional international investors and long-term capital flows, reducing the market’s heavy reliance on retail investors.
Ms. Vu Thi Chan Phuong, Chairwoman of the State Securities Commission of Vietnam, said accelerating equitization and listing activities is essential to improving the attractiveness of Vietnam’s stock market.
According to her, Vietnam is entering a new development stage requiring rapid and sustainable economic growth, making the development of capital markets and the stock market a key national priority.
She stressed that promoting equitization and state divestment alongside stock market listing not only ensures legal compliance but also enhances corporate governance, transparency, fundraising capacity and enterprise value among state-owned enterprises.
Ms. Vu Thi Chan Phuong added that Vietnam’s market upgrade would create major opportunities to attract international capital, particularly from long-term institutional investors and global passive investment funds.
Listed state-owned enterprises are expected to play an important role thanks to their large market capitalization, operations in strategic sectors and strong appeal to both domestic and foreign investors.
