Expert: Vietnam’s Stock Market Upgrade Does Not Mean an Immediate Return of Foreign Capital
Vietnam’s stock market upgrade broadens access for international investors, but an expert says active funds will not necessarily make large purchases immediately. Valuations, earnings prospects, exchange rates, liquidity and the ability to exit positions will still shape their decisions.
Investors are watching when foreign capital might return following Vietnam’s stock market upgrade. At a capital markets discussion during Vietnam Investment Forum 2027, financial expert Đào Phúc Tường said the upgrade could broaden participation by international investors, but it does not guarantee that foreign funds will immediately buy on a large scale and hold their investments for the long term.
Financial expert Đào Phúc Tường.（VietVance）
He said passive funds may allocate capital according to the timing and weights of index adjustments, while active funds are under no obligation to buy Vietnamese stocks solely because the market has been upgraded. Active funds will still assess stock valuations, corporate earnings growth, exchange rates and interest rates, as well as whether the market can accommodate large trades and exits.
Đào Phúc Tường said investment opportunities in Vietnam’s stock market remain concentrated in certain sectors. Some areas attracting international capital lack listed companies large enough to absorb investments from major institutions. Even when a stock’s price and prospects are attractive, insufficient liquidity may prevent institutions from building or exiting large positions.
Capital markets discussion at Vietnam Investment Forum 2027.（VietVance）
He also said foreign capital should not be viewed as the sole factor determining the outlook for Vietnam’s stock market. Confidence among domestic investors, the interest rate environment, liquidity and corporate earnings prospects also affect the market. To turn the access created by the upgrade into long-term capital inflows, the market still needs companies that meet international funds’ requirements and sufficient trading liquidity.
Source: VietVance
