The market capitalisation of Vietnam’s stock market reached nearly VND 7.2 trillion or about US$288 billion in 2024, a 21.2 percent rise compared to a year earlier. This increase brings market capitalisation to approximately 70.4 percent of Vietnam’s estimated GDP for 2023, according to a press release from the Ministry of Finance (MoF).
The MoF also notes that as of December 27, 2024, the VN-Index reached 1,275.14 points, marking a 12.9 percent increase from the end of 2023.
Furthermore, it says the average transaction value increased in 2024 to VND 21.1 trillion VND or about US$844 million per session, up 19.9 percent compared to the previous year.
Of note, Vietnam’s stock market has grown significantly over the past few decades, becoming one of the most dynamic and rapidly developing financial markets in Southeast Asia. The country’s stock market is primarily represented by two exchanges: the Ho Chi Minh Stock Exchange (HOSE) and the Hanoi Stock Exchange (HNX). HOSE is the larger and more active of the two, with the majority of listed companies and higher trading volumes.
The Vietnamese stock market has been characterised by rapid growth, particularly since its establishment in 2000, with an increasing number of companies listing their shares, including state-owned enterprises (SOEs) undergoing equitisation (partial privatisation) as part of the country’s broader economic reforms. Key sectors driving the market include banking, real estate, consumer goods, manufacturing, and energy, as well as a growing presence in technology and infrastructure.
Foreign investment plays a significant role in Vietnam’s stock market, as the country is increasingly seen as a promising investment destination due to its young, growing population, robust economic growth, and integration into global trade. However, foreign investors face some restrictions on ownership in certain sectors, as regulations limit foreign ownership in listed companies to a certain percentage, typically around 49%, although these limits vary depending on the industry.
Despite the stock market’s growth, challenges remain, including volatility driven by external factors such as global market fluctuations and domestic issues like liquidity concerns and the relatively low participation of retail investors. The market also faces challenges related to corporate governance, transparency, and regulatory enforcement.
The Vietnamese government has made efforts to enhance the stock market’s infrastructure and governance, including initiatives to improve market transparency, enhance liquidity, and attract more foreign capital. Additionally, the government has focused on promoting the development of financial products and instruments, such as bonds and derivatives, to provide more investment options for both local and international investors.
Looking forward, Vietnam’s stock market is expected to continue growing, with ongoing reforms aimed at improving market efficiency and fostering a more open and competitive environment. With Vietnam’s economic fundamentals, including steady GDP growth, a growing middle class, and an expanding export sector, the stock market is poised to be an important driver of the country’s financial development.
See also: The Vietnam Stock Exchange: Unpacked