Vietnam stock market could reach new heights in 2025

Business Forum Magazine had a discussion with Mr. Han Bok Hee – Chairman of the Member Council of Shinhan Securities Vietnam, on this matter.

- Vietnam’s stock market recorded net foreign selling in 2024. What factors will influence foreign capital inflows into the market in 2025, in your opinion?

Both external and domestic factors contributed to net foreign sales in 2024. The first key factor was the USD/VND exchange rate. Exchange rate fluctuations over the past year and their correlation led to foreign capital outflows, reflecting their impact on the market.

In addition to global macroeconomic factors, domestic market developments also played a role. Large-cap stocks experienced impressive gains in 2024. For instance, FPT surged over 70%, increasing its weight in investment portfolios and prompting fund restructuring to reduce exposure. This led to a relaxation of FPT’s foreign ownership limit after years of being fully utilized. Similarly, banking stocks such as TCB rose by over 50% and HDB by more than 40%. Positive business performance supported stock price growth, alongside government and central bank policies aimed at attracting FDI into technology and semiconductor sectors, as well as Circular 02, which restructured debts. These measures have created a favorable business environment for listed enterprises.

These factors will continue into 2025: U.S. policies under the Trump administration, EU and Chinese policies, and the Fed’s interest rate decisions will further impact exchange rates. Exchange rate movements, coupled with domestic fiscal and monetary policies, will be key factors influencing foreign capital inflows.

- Which sectors and industries will attract the most interest, and why?

The first important factor is the market capitalization of industries, as sectors must be large enough to absorb foreign capital. Foreign investment typically gravitates toward major sectors such as finance, real estate, basic materials, and food and beverages (F&B).

Additionally, the technology and infrastructure sectors are expected to attract foreign inflows due to investment-friendly policies in the semiconductor and artificial intelligence industries. This will make listed technology and infrastructure companies attractive investment destinations.

Of course, investment inflows into specific sectors will also depend on their long-term growth potential. The financial sector, for example, remains a top investment choice due to its indispensable role in Vietnam's overall economic development. The technology sector, on the other hand, plays a crucial role in enhancing productivity across the economy. Meanwhile, real estate and infrastructure serve as the backbone and foundation for long-term economic growth.

- How will Circular 68, the CCP model, and market upgrading expectations impact the stock market?

These developments are highly positive. Circular 68 is considered a crucial step in aligning Vietnam’s market with international standards. The implementation of Circular 68 and the expected launch of the Central Counterparty (CCP) model will provide a more favorable environment for foreign investors. Given the significant role of foreign investors in Vietnam’s stock market, liquidity will undoubtedly improve substantially.

Once the market is upgraded, it will attract more capital, as Vietnam's stock weighting in global indices will increase. It is estimated that the market’s potential upgrade to MSCI Emerging Market status could attract an additional $4–7 billion from international investment funds.

- How do you assess the effectiveness of investment capital and asset transactions from South Korea in Vietnam? What are your investment trend forecasts for the upcoming year?

Several Korean securities firms, such as Shinhan, KB, Mirae Asset, and KIS, have actively participated in Vietnam's stock market and achieved significant successes. In recent years, their return on equity (ROE) has been relatively promising, ranging from 5% to 9%. In addition to securities firms, Korean asset management companies have also successfully attracted investment flows into Vietnam. According to Fiinpro data, despite ETF outflows in 2024, the VN30 ETF managed by KIM and Mirae Asset still attracted over 1 trillion VND in capital during the year.

The Vietnamese government has set an ambitious GDP growth target of 6.5%–7% for 2025, which is a highly positive figure given the current global economic uncertainties. With such an optimistic outlook, investment flows and asset transactions from South Korea are expected to continue growing and delivering strong performance in the coming year.

Despite ongoing global uncertainties, Vietnam’s stock market is poised to achieve new milestones in 2025. The strong macroeconomic foundation and promising profit growth prospects of listed companies will serve as a launching pad for the market. In 2025, market profit growth is expected to exceed 20%. Additionally, the potential market upgrade will act as a powerful catalyst to boost trading liquidity, helping the market achieve its targets more easily.

Thank you for your insights!