World Bank (WB) specialists said that Vietnam’s equity market holds strong potential to become a major source of financing for the private sector, the Vietnam News Agency (VNA).
In the “Taking Stock” August report titled Reaching New Heights in Capital Markets, World Bank experts noted that, supported by robust macroeconomic conditions, Vietnam’s capital market has seen significant development over the past decade.
Healthy economic growth, a stable exchange rate, low inflation, and political stability have positioned the market to align with regional peers in terms of relative size. By 2023, the stock market had reached over 90 percent of GDP, comparable to Indonesia. Market capitalisation grew from 38 to 58 percent of GDP, peaking at 93 percent in 2021.
When assessed in terms of its capacity to facilitate financial intermediation, Vietnam’s capital market indicators highlight significant room for further expansion.
Despite the market’s high equity capitalisation, the World Bank noted that the funds rais
ed through the stock exchanges over the past five years have remained relatively modest.
The absence of a strong institutional investor presence in the corporate securities market has led to a dominance of individual investors, whose collective behaviour often drives market volatility. This has not only increased risk in the corporate bond market but also impeded the market’s growth as a viable financial resource for the corporate sector.
Source: Emirates News Agency