Speaking at the press conference for the Asian Securities Forum Annual General Meeting (ASF AGM) on 23/9, Pham Phu Khoi, General Secretary of the Vietnam Bond Market Association (VBMA), stated that following the stock market upgrade by FTSE Russell, Vietnam's next objective should be to improve its national credit rating.

According to Khoi, the stock market upgrade could draw approximately 1,2-1,5 billion USD from passive investment funds, which allocate portfolios based on indices. Other analyses suggest this figure could reach 2 billion USD.

However, the global bond market significantly surpasses the stock market in size, offering substantial potential for capital attraction. The VBMA anticipates that if Vietnam advances its credit rating, capital inflow into the bond market could be tens of times greater than into stocks, potentially reaching 10-20 billion USD.

The national credit rating directly influences the government's and local authorities' ability to mobilize capital and the interest costs on public debt. Additionally, interest rates for foreign loans taken by domestic private enterprises are determined by this rating.

Currently, Vietnam remains below investment grade according to the national credit assessments of three major organizations. S&P Global Ratings and Fitch Ratings both assign Vietnam a BB+ rating with a stable outlook. Moody's maintains a Ba2 rating, having upgraded its outlook from stable to positive in May.

A VBMA representative noted that many international bond investors require a country to be rated at investment grade by at least two of the three major credit rating agencies before allocating capital. Vietnam has not yet reached this threshold.

'Improving the credit rating will be one of the important conditions for Vietnam to access a larger group of international institutional investors', Khoi stated.

Pham Phu Khoi, General Secretary of the Vietnam Bond Market Association (VBMA), speaking at the press conference. *Photo: VBMA*

From the perspective of the stock market, Hoang Hai Anh, Vice Chairwoman and General Secretary of the Vietnam Association of Securities Business (VASB), believes that the upgrade by FTSE Russell is a positive signal. It reflects ongoing infrastructure reforms and brings the Vietnamese market closer to international investors.

However, she emphasized that while a stock market upgrade is a necessary condition, it is not sufficient. To attract sustainable international capital flows, Vietnam requires a more comprehensive strategy that clearly defines its position on the regional capital market map.

She cited examples: Singapore positions itself as a gateway for international capital into Asia, Malaysia leverages its strength in Islamic finance, while Thailand has built a high-liquidity market. Based on these defined positions, these countries implement cohesive policies, products, and infrastructure.

Another issue, according to the VASB representative, is enterprise quality. While improved trading infrastructure facilitates market access for investors, long-term attractiveness still hinges on the capacity, governance, and quality of listed companies.

Furthermore, Vietnam needs to develop institutional investors and better mobilize domestic resources. She explained that funds and institutional investors will serve as crucial conduits for bringing international capital into Vietnam. Japan's experience also demonstrates that markets can proactively channel a portion of citizens' savings into long-term investments through sustained programs.

The 31st ASF AGM will take place in Hanoi from 30/9-3/10. It will include a dedicated session on capital mobilization and the stock market's role in unlocking resources for Vietnam's economy.

Phuong Dung