Vietnam stock market experts discuss long-term capital and upgrades

Experts are discussing strategies to transform the Vietnamese stock market from a high-liquidity environment into a stable source of long-term capital for businesses. During a recent seminar, Johan Nyvene, Chairman of Ho Chi Minh City Securities Corporation (HSC) and Vice Chairman of the Vietnam Securities Association (VASB), noted that while capital flows are present, the ability to form long-term capital remains limited. He highlighted that 85-90% of daily trading volume comes from domestic individual investors rather than professional institutional funds, creating sustainability concerns. To address this, Nyvene suggested developing a long-term retirement savings mechanism similar to the US model to encourage domestic institutional investment.

Regarding the potential upgrade of Vietnam's market status, expert Nguyen The Minh projected significant inflows from international funds. He estimated that passive funds could contribute approximately $2 billion in capital through a four-stage disbursement process. Furthermore, active funds—which typically hold 4 to 5 times more capital than passive funds—could potentially bring an additional $5 billion to $6 billion into the market. Such an upgrade is expected to diversify the investor base, attracting new capital from US financial institutions and other markets beyond the traditional European and Asian sources.