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Capital-market channels widened after FTSE upgrade: expert

Capital-market channels widened after FTSE upgrade: expert

Việt Nam is broadening its capital-market channels as the FTSE upgrade opens access to more global investors while new bond mechanisms seek to mobilise longer-term funding for infrastructure.

HÀ NỘI — Việt Nam is widening its capital-raising options as its stock market enters FTSE Russell’s Secondary Emerging Market category and new rules give HCM City greater authority to develop municipal and project bonds.

The two developments could expand access to both international equity investors and longer-term debt capital, but market depth, liquidity, transparency and risk management will be key to turning the new access into sustained investment, according to EBC Financial Group.

Việt Nam officially entered FTSE Russell’s Secondary Emerging Market category on September 21 after reforms to trading, settlement and foreign-investor access. The reclassification gives Vietnamese equities access to a much larger pool of international capital, but also puts them in direct competition with other emerging markets.

Foreign flows have yet to translate into sustained buying. Reuters data cited by EBC showed foreign investors recorded net purchases of about VNĐ2.7 trillion (US$103 million) in the week before the upgrade, but remained net sellers of about VNĐ91 trillion year-to-date.

FTSE Russell has estimated that the reclassification could redirect as much as $6 billion into Việt Nam in the future. But benchmark-driven passive flows are only part of the picture, as active investors will also assess valuations, earnings, liquidity, currency movements and macroeconomic risks before allocating capital.

“The upgrade gives Việt Nam access to a much larger pool of international capital, but it also places the market in a more demanding competition,” said Sana Ur Rehman, senior market analyst at EBC Financial Group.

He said passive flows would follow the index timetable, while active investors would assess whether Việt Nam could generate sufficiently attractive returns to increase their allocations relative to other emerging markets.

Việt Nam’s relatively attractive valuation could help draw active investors. VinaCapital estimated the market’s 2026 forward price-to-earnings ratio at about 12.7 times, below 14.3 times for Thailand and 14.9 times for Malaysia. It also forecast earnings per share growth of 42.3 per cent in 2026 and 13.4 per cent in 2027.

EBC said a sustained re-rating would depend on earnings growth broadening beyond a small group of large-cap companies. Growth across banks, manufacturing, consumer businesses, technology, logistics and infrastructure could help narrow Việt Nam’s valuation discount against regional peers.

“A low valuation creates an attractive entry point, but it is not enough to drive a sustained re-rating,” Rehman said, adding that active investors would look for durable earnings and cash flow across a broader range of sectors.

Foreign inflows are likely to remain selective in the coming months rather than turn into sustained buying. EBC expects investors to focus on companies with strong earnings prospects, while broader inflows will depend on market liquidity and the global interest-rate and currency environment.

The next major milestone will come in March 2027, when FTSE Russell is scheduled to add a further 20 per cent of the eligible weight, taking the cumulative inclusion factor to 30 per cent.

A wider funding base

While the FTSE upgrade expands access to equity capital, Việt Nam is also developing instruments to meet the longer-term funding needs of infrastructure projects.

The Urban Development Law took effect on October 1, giving the HCM City People’s Council authority to decide on municipal and project bond issuance through the Việt Nam International Financial Centre in HCM City (VIFC-HCMC).

VIFC-HCMC has identified municipal and project bonds as foundational financial products, with potential applications including metro systems, ports, logistics infrastructure and energy projects. The issuance framework was still under consultation in September, and the first actual issuance has not yet been verified.

The rationale is partly about matching the maturity of funding with the life of an asset. Railways, ports, logistics networks and energy projects can take years to build before generating stable cash flows. Long-term bonds could therefore complement bank credit by connecting these projects with institutional investors able to hold assets over longer periods.

“The opportunity here is to create a broader financing system in which banks and capital markets can play complementary roles,” Rehman said.

"Long-term infrastructure benefits from long-term funding, and a deeper bond market can help connect projects with investors that are prepared to hold duration over many years."

But issuing bonds is not the same as building a functioning bond market. EBC identified pricing, liquidity, transparency and investor diversity as key requirements. Investors need sufficient information to assess issuers and projects, while secondary-market liquidity is needed to allow them to adjust their exposure.

International capital could further broaden the funding base, but would introduce additional currency risks.

For equity investors, the relatively high level of US Treasury yields creates an alternative source of returns against which emerging-market assets are assessed. For project bonds, meanwhile, borrowing in a foreign currency while generating most project revenues in đồng can expose issuers to exchange-rate movements.

The developments point to a broader capital-market structure in Việt Nam, with the FTSE upgrade widening access to international investors and municipal and project bonds opening new channels for long-term capital. The key test will be whether these channels can build sufficient liquidity, transparency and investor diversity to support sustained capital flows.

Source: BIZHUB/VNS

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Institutional reforms provide boost for business growth

Institutional reforms provide boost for business growth

Institutional reform should go beyond reducing red tape to build business confidence and encourage companies to invest and expand operations.

Hanoi (VNA) - Cutting administrative procedures, resolving legal bottlenecks and unlocking resources are key solutions to improve the business environment, give companies greater confidence to invest and strengthen their competitiveness, helping drive sustainable growth.

For businesses, the quality of the business environment is reflected in the time required to complete administrative procedures, compliance costs, access to capital and land, and policy stability. Institutional reform, therefore, should go beyond reducing red tape to build business confidence and encourage companies to invest and expand operations.

Nguyen Xuan Tho, Deputy Director of the Agency for Private Enterprise and Collective Economy Development under the Ministry of Finance, said the ministry has proactively reviewed practical conditions and advised the Government to issue Resolution No. 02/NQ-CP on key tasks and solutions to improve the business environment and enhance national competitiveness in 2026, with seven priority groups of measures and specific responsibilities assigned to ministries, sectors and localities.

The measures focus on improving the institutional framework, reviewing conditional business lines, streamlining administrative procedures, unlocking resources and supporting businesses. The goal is not merely to refine regulations, but to remove barriers directly affecting investment, production and business operations.

In the first nine months of 2026, efforts to review and improve the legal framework were stepped up. At the first session of the 16th National Assembly, lawmakers passed nine laws and 31 resolutions to promptly translate development policies into law.

The Ministry of Finance also advised on the refinement of various policies on investment, corporate income tax, personal income tax and tax administration, aiming to address shortcomings identified in practice.

One notable development has been the expansion of financial support for businesses. In the nine-month period, the ministry advised on and implemented tax, fee and charge exemptions, reductions and payment extensions worth a total of about 245.6 trillion VND (9.5 billion USD). These measures have helped ease cash-flow pressures, sustain business operations and free up resources for investment.

Another area of reform is strengthening dialogue with businesses and addressing their concerns. Tho said that, to date, ministries and agencies had responded to and fully resolved 146 of the 202 groups of business recommendations.

From the business community’s perspective, the gap between policy and implementation remains a major bottleneck in the business environment.

Ho Sy Hung, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said businesses could have different experiences with the same regulation depending on the locality.

Decisive implementation can help companies benefit from policies sooner, while delays elsewhere may cause them to miss investment and business opportunities, he elaborated.

In July 2026, VCCI compiled nearly 900 specific concerns raised by businesses into 53 groups of issues across 10 sectors. The feedback showed that businesses need not only individual administrative procedures to be resolved, but also a stable, consistent and predictable policy environment, Hung said.

Hung said that while the previous phase focused on breakthroughs in institutional reform, the next should place greater emphasis on breakthroughs in implementation.

Reform should therefore be measured not simply by the number of amended regulations or procedures cut, but by whether policies are implemented consistently, processing times are genuinely shortened and business costs are reduced, he added.

To narrow this gap, Tho suggested ministries, sectors and localities improve the quality of lawmaking, resolutely remove barriers to market access, further simplify administrative procedures, make processes transparent and standardise how business recommendations are received and addressed.

Digital transformation in public service delivery should go hand in hand with reducing unnecessary face-to-face interactions, curbing informal costs and strengthening dialogue to resolve problems at an early stage, he said.

Tho also proposed reforming state management by shifting from pre-inspection to post-inspection, as appropriate for each sector, based on clear standards and technical regulations and stronger risk-based oversight.

Business environment reforms should also be aligned with the goal of improving growth quality. Nguyen Duc Hien, deputy head of the Party Central Committee’s Commission for Policy and Strategy, stressed that in the new phase, promoting the private sector, harnessing the potential of all economic sectors, and advancing science and technology, innovation and digital transformation are key foundations for achieving the target of double-digit economic growth.

Hien said traditional growth drivers need to be revitalised to meet new development requirements. For exports, the focus should go beyond increasing turnover to raising value added, boosting the share of value created domestically and setting appropriate development directions for each industry group.

Sectors with the potential to drive growth and generate spillover effects, including research and development (R&D), tourism, logistics, energy, and finance and banking, need to be promoted.

Meanwhile, established industries such as electronics, digital technology, textiles and garments, footwear, and food processing should continue to upgrade product quality, strengthen technological capabilities and increase domestic value added, Hien suggested.​

Vietnam corporate bond market slows as interest rates rise

Vietnam corporate bond market slows as interest rates rise

Vietnam’s corporate bond market slowed in the third quarter of 2026, with issuance value falling 26% from the previous quarter, while issuance yields continued to rise across all sectors.

Bond issuance slows

According to a recent report by S&I Ratings, Vietnam’s corporate bond market recorded 153 successful issuances in the third quarter, with a total value of VND179.4 trillion ($6.93 billion), down 26% from the second quarter.

The trend mirrored 2025, when issuance surged in Q2 following a sluggish start to the year before correcting in Q3.

Year-on-year, issuance value in Q3 rose 7.8%, while the cumulative increase for the first nine months reached 6.7%.

Notably, public bond offerings performed strongly, with 16 successful issuances in Q3 worth a combined VND31.6 trillion ($1.22 billion), up 55% year-on-year and the highest level on record.

Commercial banks continued to dominate this channel, accounting for eight of the 16 offerings. Individual issuances were mostly valued at VND1 trillion to VND3 trillion ($115.93 million), while Agribank alone successfully issued VND15 trillion.

In the first nine months, total corporate bond issuance reached VND464.1 trillion ($17.93 billion). During the same period, bonds worth VND132.8 trillion ($5.13 billion) matured, up 5.7%, while early bond buybacks totalled VND228.6 trillion, down 4.5%. Net issuance value was reported at VND102.6 trillion ($8.83 billion).

As of the end of September 2026, outstanding corporate bonds totalled approximately VND1,540 trillion ($59.51 billion), up 7.1% from the end of 2025.

According to S&I Ratings, real estate bond issuance corrected in Q3 after surging in Q2. The number of successful issuances fell from 43 to 21, while total issuance value dropped 55% quarter-on-quarter.

The decline was mainly driven by changes in fundraising activity among major corporate groups. Issuance by the Vingroup group fell to VND16 trillion ($618.3 million) in Q3 from VND61 trillion in the previous quarter. Meanwhile, the Masterise group maintained issuance at VND23.5 trillion ($908.14 million) in Q3.

The ratings agency said the two corporations typically account for as much as 80% of total issuance by the real estate sector, giving their fundraising activity a significant influence on the industry's overall performance.

Despite the sharp quarterly decline, real estate bond issuance in Q3 was still up 27% from a year earlier. For the first nine months as a whole, issuance increased 121% year-on-year.

S&I Ratings noted the real estate market was facing difficulties amid rising interest rates, which were affecting project implementation schedules and companies' financing costs. However, substantial funding requirements for project development would remain a key driver of real estate firms' bond fundraising in the coming period.

In the banking sector, total bond issuance reached VND120 trillion ($4.64 million) in Q3, up 11.8% year-on-year and 7% from Q2. However, cumulative issuance in the first nine months remained 20% below the same period in 2025.

With banks accounting for around two-thirds of total corporate bond issuance, the sector's decline was also a key factor behind the market's slower growth.

Issuance rates approach 2022-2023 peaks

Corporate bond issuance rates continued to rise across all sectors in Q3/2026. Coupon rates had increased by an average of around 250 basis points from their 2025 lows. However, the pace of increase slowed considerably in Q3 as rates approached the peaks recorded in 2022-2023.

For banks, the average issuance rate reached 8.85% per year in Q3, exceeding the 2022 average of 8.7%. However, it remained below the previous peak of 9.7%.

Bank bond coupon rates in Q3 generally ranged from 8% to 9.7% per year. Some issuances carried rates of 10% or higher, including Sacombank bonds with a fixed coupon of 10% and PVcomBank bonds paying a rate linked to the average 12-month savings deposit rate for individual customers plus a margin of 4.6 percentage points, equivalent to around 10.4% at the time of the report.

Meanwhile, issuance rates for real estate companies and firms in other sectors also rose sharply, reaching around 12.5-13% per year. Even so, these rates remained below the peak range of 14-14.5% recorded in 2022-2023.

The trend highlights continued increases in bond fundraising costs as interest rates approach levels last seen during the previous high-rate period.

Maturity pressures to rise in late 2026 and 2027

Maturity pressures in Vietnam's corporate bond market are expected to increase significantly in Q4/2026. S&I Ratings estimates that bonds worth around VND93 trillion ($3.59 billion) will fall due for repayment during the quarter, the highest amount for any quarter this year. Real estate companies account for approximately VND46.9 trillion ($1.81 billion), or nearly half of the market's total maturities.

The pressure is expected to intensify further in 2027. Total corporate bonds maturing next year could reach around VND276 trillion ($10.67 billion), up 22% from 2026. Real estate companies alone are expected to face approximately VND156 trillion ($6.03 billion) in maturities, accounting for 57% of the market total.

Against this backdrop, new bond issuance will serve not only to finance projects but also to play an important role in restructuring existing debt.

Beyond refinancing pressures, the economy's medium- and long-term funding needs are entering a period of strong growth to support real estate developments, urban areas, transport infrastructure, energy and industrial projects. Corporate bonds are therefore expected to remain an important funding channel, providing additional medium- and long-term capital to the economy.

However, the market's ability to absorb new issuance could be affected by domestic and international interest rate movements. Persistent inflation risks, coupled with international government bond yields remaining elevated, could keep interest rates high at least through the first half of 2027.

For bond issuers, this would mean higher financing costs, particularly for companies with high leverage or substantial funding needs.

S&I Ratings said the medium-term outlook for Vietnam's corporate bond market remained positive, supported by strong corporate funding demand and mounting refinancing pressures.

Nevertheless, with interest rates still high, the market would need more time to continue restructuring on a sustainable basis, attract a broader range of investors, and strengthen its role as a key source of medium- and long-term financing for the economy.


General Secretary, President To Lam begins official visit to the EU and Belgium

General Secretary, President To Lam begins official visit to the EU and Belgium

The visit aims to further strengthen cooperative relations with key partners in Europe.

General Secretary of the Communist Party of Vietnam Central Committee and President To Lam, his spouse, and a high-ranking Vietnamese delegation, arrived in Brussels on October 21 afternoon (local time), marking the start of an official visit to the European Union (EU) and the Kingdom of Belgium, at the invitation of European Council President António Costa and Belgian Prime Minister Bart De Wever.

According to the Vietnam News Agency, the top Vietnamese leader, his spouse and the delegation were welcomed at Melsbroek Military Airport by First Vice President of the Belgian Senate Andries Gryffroy; Belgian Ambassador to Vietnam Pieter Leenknegt; Vietnamese Ambassador to Belgium and Head of the Vietnamese Delegation to the EU Nguyen Huong Tra, among others.

The visit aims to further strengthen cooperative relations with key partners in Europe.

The visit takes place in the context of the ongoing deepening of Vietnam-EU relations. Since establishing diplomatic relations in 1990, both sides have gradually expanded cooperation in various fields. The Vietnam-EU Framework Agreement on Comprehensive Partnership and Cooperation, effective since 2016, provides an important political and legal framework for bilateral relations.

In January 2026, Vietnam and the EU upgraded their relationship to a comprehensive strategic partnership, opening opportunities to enhance cooperation in economics, trade, green transition, energy, innovation, security, and regional and international issues.

Regarding the Kingdom of Belgium, more than 50 years since establishing diplomatic relations in 1973, bilateral cooperation has been continuously strengthened in political, trade, agriculture, education, science and technology, and development cooperation. The two countries also actively coordinate in multilateral forums.

The visit reaffirms the importance of the EU and Belgium in Vietnam's foreign policy and international integration; it contributes to strengthening political trust, promoting the realization of high-level commitments, and advancing cooperative relations to a new stage of development.

Leveraging overseas resources, promoting knowledge and investment connections

On the same afternoon in Brussels, General Secretary and President To Lam, along with his spouse and the delegation, met with staff and employees of the Vietnamese representative agencies in Belgium and representatives of the Vietnamese community in Europe.

During the meeting, Ambassador Nguyen Huong Tra reported that the community of approximately 1.5 million Vietnamese in Europe is increasingly stable, deeply integrated, holds a position in the host countries, and always looks towards their homeland.

Associations, particularly the Union of Vietnamese Associations in Europe, have played a role in connecting the community, preserving cultural identity, and promoting friendly relations between Vietnam and European countries.

Representatives of the overseas Vietnamese expressed their desire to contribute more practically to the country's development, especially through connecting knowledge, technology, capital, and international networks with domestic projects. They also requested more attention to preserving the Vietnamese language and culture for the younger generation born abroad.

In his remarks at the meeting, General Secretary and President To Lam acknowledged and highly appreciated the contributions of the Vietnamese community in Europe to the country and the host society, particularly in business, science, technology, education, and culture.

He emphasized that in the new development phase, Vietnam needs to combine internal strength with international resources, promoting the great unity of the entire nation, including over 100 million compatriots in the country and 6.5 million Vietnamese living, studying, and working abroad.

Regarding Resolution No. 23-NQ/TW of the Politburo on the work of overseas Vietnamese, General Secretary and President To Lam affirmed that the Party and State will continue to improve institutions, mechanisms, and policies in a comprehensive, open, and breakthrough manner, creating conditions for overseas Vietnamese to participate deeply in socio-economic life, accompanying and co-creating in the country's development process.

He urged Vietnamese associations in Europe to continue to play a core role in solidarity, enhancing the community's position, and acting as a bridge to promote friendly and cooperative relations between Vietnam and European countries.

Particularly, the business community needs to actively bring Vietnamese goods to the European market and connect European businesses to invest in Vietnam. Experts, intellectuals, and scientists should promote research, develop advanced and strategic technologies, and implement cooperation programs and projects with the country.

General Secretary and President To Lam also called on ministries, sectors, and localities to proactively connect and create a favorable environment for overseas Vietnamese to invest in, research, and transfer technology to the homeland. Vietnamese representative agencies abroad must be a reliable support, protecting the legitimate rights and interests of the overseas Vietnamese, while promoting specific and practical cooperation programs.

On this occasion, General Secretary and President To Lam praised the initiative to organize the 5th Global Overseas Vietnamese Conference, scheduled to take place in Hanoi from December 17–20, 2026. He urged relevant agencies to coordinate and facilitate the participation of overseas Vietnamese.


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