The Key to Upgrading Vietnam’s Stock Market and Attracting FDI: A Deutsche Bank Perspective

Following the successful investment forum, “From Policy to Practice: Upgrading Vietnam’s Capital Market to Emerging Market Status”, in Singapore, on August 8, 2024, the Chairwoman of the State Securities Commission of Vietnam, Vu Thi Chan Phuong, and her delegation met with the Association of Global Custodians (AGC) to discuss solutions for upgrading the country’s stock market. The meeting was also attended by representatives from the State Bank of Vietnam and leaders of units under the SSC.

On the side of the AGC, the meeting saw the participation of representatives from several major banks, including Citibank, Deutsche Bank, The Bank of New York Mellon (BNY Mellon), and J.P. Morgan Chase NA (J.P.Morgan).

Speaking at the meeting, Ms. Uri Juliana Lee, Executive Director of the Deutsche Bank’s APAC Economic Research Center, positively assessed Vietnam’s economic development in the recent period. To further enhance the attractiveness of the stock market and attract capital to Vietnam, Ms. Lee stated that Vietnam has been implementing long-term solutions and efforts by the management agency to improve the transparency of the stock market, enhance information and data for foreign investors, and thus be included in the emerging market index basket.

Regarding the State Bank of Vietnam, Ms. Lee proposed a mechanism for sharing information on the management of bad debts of commercial banks to create conditions for foreign investors to objectively assess the Vietnamese financial market.

Ms. Lee believes that the proactive sharing and exchange of information between management agencies and investment organizations will effectively support the process of upgrading Vietnam’s stock market, thereby continuing to attract FDI into the Vietnamese market in the coming time.

At the meeting, Mr. Doris Tio, Vice Chairman of Global Asset Servicing at BNY Mellon, suggested further simplifying the procedures for opening indirect investment capital accounts and building a customer data center for market members to access customer information quickly and facilitate the opening of trading accounts for foreign investors.

Chairwoman Vu Thi Chan Phuong acknowledged the proposals from the representative of the custodian banks and shared that, in the past time, Vietnam’s management agencies have actively exchanged information with international organizations to find solutions for the goal of upgrading the country’s stock market.

The Chairwoman added that, in the coming time, the SSC will organize discussions to gather more opinions on payment cycles and CCP models, procedures for opening indirect capital accounts and granting trading codes, and margin ratios for foreign investors to address concerns and create the best conditions for foreign investors to access the market in accordance with Vietnamese laws and international practices.