Vietnam's Stock Market Upgrade to 'Secondary Emerging' Could Attract $6 Billion
Vietnam's stock market today is poised for an upgrade, with FTSE Russell set to elevate its status from 'frontier' to 'secondary emerging' in March. This could attract significant investment, potentially up to $6 billion, following an upgrade announcement in October. Enhancing investor relations (IR) is crucial for Vietnam to meet international standards and capitalise on this opportunity.
Effective IR is vital for attracting and retaining investors. It involves transparent communication, understanding investor expectations, and managing crises. As Vietnam's market grows, IR will play a crucial role in bridging companies and investors, conveying business strategies and financial health, and supporting capital-raising efforts.
Currently, 67% of listed companies in Vietnam meet the 'Information Disclosure Best Practices 2025' standard, indicating improved practices. However, challenges remain. 80% of market violations stem from information disclosure, highlighting the need for better enforcement of IR rules. Companies must balance transparency with protecting sensitive business information, with clear regulations defining business secrets.
As Vietnam's market upgrade approaches, companies must embrace IR as a driver of corporate value, not just a compliance formality. With improved IR, Vietnam can attract significant investment, enhance market transparency, and support listed companies' growth. The upgrade could initially attract $1 billion from ETFs, followed by $5-6 billion from active funds, making IR a critical factor in Vietnam's market development.
