KRX launch pivotal for Vietnam’s stock market

Speaking at a regular Ministry of Finance (MoF) press conference on April 3, Ha Duy Tung, vice chairman of the State Securities Commission (SSC), said the MoF is working to improve the legal framework and related policies to meet upgrade criteria set by international organisations.

Deputy Minister of Finance Nguyen Duc Chi chairs the press conference

Last September, the MoF issued Circular No.68/2024/TT-BTC, which has received positive feedback from investors. Effective from November 2, 2024, Circular 68 amends and supplements various provisions related to securities trading, transaction clearing and settlement, the operations of securities companies, and information disclosure requirements.

One notable change introduced under Circular 68 allows foreign institutional investors to place stock purchase orders without needing to have sufficient funds available at the time of the order. This is seen as a key reform aimed at removing bottlenecks and aligning with the standards required to transition Vietnam’s stock market from frontier to secondary emerging market status.

Experts have welcomed the new regulations, calling them practical and highly feasible. Many expressed hope that Circular 68 would positively influence Vietnam’s market upgrade process.

Tung added that in the near future, the MoF will continue addressing technical issues while promoting investment and engaging in dialogue with international institutions, aiming to secure positive evaluations for a possible upgrade this year.

Commenting on foreign capital outflows from Vietnam’s stock market in the first quarter of 2025, Tung reported that foreign investors recorded net sales of $901 million. On April 3 alone, net sales reached $127.4 million, attributed in part to the latest reciprocal tariff measures imposed by the US administration.

However, he noted that foreign net sales accounted for just 1.9 per cent of the total portfolio value–a relatively modest share.

Deputy Minister Chi commented that capital withdrawals or injections by foreign investors are common market behaviours, driven by each fund’s strategies and global policy shifts. He noted that psychological factors and broader market sentiment also play a role.

“For example, today’s psychological impact is not only affecting Vietnam’s stock market but is being felt across global markets,” he said.

Regarding the upgrade process, Chi explained that capital outflow is not a determining criterion. Instead, the focus is on improving legal standards, enhancing transparency, facilitating foreign investor access, and elevating market quality. Rating agencies ultimately assess the market based on its qualitative progress and investor perceptions.

“The top goal is to develop a stable, sustainable, and high-quality stock market,” he said, adding that regulatory agencies and market participants share the responsibility for achieving this objective.

Chi also noted that the SSC and stock exchanges are actively preparing for the go-live date of the new KRX trading system, scheduled for May 5. This system, developed by the Korea Exchange, is now in its final testing phase and is expected to improve market operations significantly.

“The transition must proceed smoothly, with particular attention to system security. We trust the contractors, investors, and relevant agencies to follow through as planned,” he said.

The launch of the KRX system is highly anticipated by investors, as it will shorten settlement times, introduce new features, and enable the development of additional products and services. It is viewed as a critical milestone in Vietnam’s broader efforts to upgrade its stock market.

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