On April 28, 2025, the Vietnamese stock market will face significant changes as the last day for restructuring the portfolios of Exchange-Traded Funds (ETFs) approaches. The Ho Chi Minh Stock Exchange (HoSE) has announced updates to the HOSE-Index set for April 2025, which includes the VN30 index basket. These changes will take effect from May 5, 2025, marking a pivotal moment for investors and market participants.
The VN30 index, which is critical for assessing the performance of the Vietnamese stock market, will undergo a notable restructuring focused on limiting industry groups according to the Global Industry Classification Standard (GICS) at a maximum of 40%. Currently, the financial industry group, as classified under GICS, includes various sub-sectors such as banking, securities, and insurance. This restructuring is expected to lead to a decrease in the proportion of financial stocks within the VN30 index, redistributing capital flows to other sectors.
As of now, there are four ETFs that utilize the VN30 index as a benchmark: the DCVFMVN30 ETF, SSIAM VN30 ETF, KIM Growth VN30 ETF, and MAFM VN30 ETF. These funds have a combined estimated asset value of approximately 7.8 trillion VND. Recent predictions from BSC Research indicate that these ETF funds are likely to sell significant amounts of banking stocks as part of the upcoming restructuring. Specifically, the anticipated sales include LPB (5.2 million shares), SSB (4.1 million shares), VCB (1.9 million shares), ACB (7 million shares), and VPB (9.5 million shares).
Conversely, some stocks are expected to see increased purchases to boost their representation in the index. Stocks such as HPG (11.7 million shares), MWG (3.5 million shares), VHM (3.4 million shares), and VRE (3.3 million shares) are among those projected for strong buying activity.
On the afternoon of April 21, 2025, VNDiamond is set to announce its new list of stocks. According to BSC Research, MWG shares may see an increase in their proportion within the basket, having met all the necessary criteria for inclusion. Additionally, CTD shares could be added to the basket for the first time, while VRE shares might be removed due to non-compliance with foreign ownership limits (FOL). VIB shares are also at risk of being placed on a waiting list for removal due to not meeting the required FOL threshold.
In a related context, foreign experts have been weighing in on the Vietnamese stock market's potential amidst global changes. On April 19, 2025, Yuanta Vietnam Securities Company hosted a regional investment conference themed "From Asia to Vietnam – Connecting Asian Vision, Creating a Prosperous Era." This event featured leading economic and financial experts from Hong Kong, Taiwan, South Korea, and Thailand. The discussions highlighted the resilience of the Vietnamese market, especially following a period of significant volatility triggered by the U.S.-China trade war.
According to Yen Chen Hui, an expert from Taiwan, the escalating trade tensions could yield mixed impacts on Vietnam's economy, which has substantial trade relationships with both the U.S. and China. Currently, approximately 30% of Vietnam's exports are directed to the U.S., while exports to China account for about 10%. However, imports from China constitute a staggering 30% of Vietnam's total imports, resulting in a substantial trade deficit.
Despite these challenges, Yen Chen Hui posited that the ongoing trade conflict might present opportunities for Vietnam. As global businesses seek to reduce their reliance on Chinese supply chains, Vietnam could emerge as an alternative destination, enhancing domestic production value and stimulating import substitution trends. He noted, "When global companies reduce their dependency on China, Vietnam will become an alternative destination, promoting import substitution and enhancing domestic production value. While there may be short-term challenges, in the long run, the U.S.-China trade tensions could positively impact Vietnam's economy."
Similarly, Chu Ka Kit, a securities expert from Hong Kong, emphasized that the U.S. tax policies could affect global markets, not just Vietnam or the Asian region. He viewed this as a positive factor for Vietnam's economic development, stating, "The wave of production relocation from China is prompting many international firms to choose Vietnam as their new hub. This not only stimulates economic growth and enhances the quality of domestic financial resources but also opens opportunities for new companies to enter the stock market, enriching the investment landscape."
Mathew Smith, the analysis director at Yuanta Vietnam, discussed the upcoming implementation of the KRX system following the April 30 and May 1 holidays. He noted that the introduction of a central counterparty (CCP) system next year could resolve many technical issues currently faced by the Vietnamese market. He believes this will facilitate MSCI's assessment for upgrading Vietnam's market status and significantly impact the capital market, ultimately benefiting brokerage firms.
Adding to this optimism, Min Byungkyu, an expert from South Korea, expressed confidence in the government's efforts to attract foreign investment by easing ownership limits for overseas investors. He stated, "The government is doing very well in inviting investors to bring their capital into Vietnam. I believe the stock market has a very promising future."
Jaruchart Chuchachart, an expert from Thailand, also shared a positive outlook, noting Vietnam's rapid recovery and its status as an attractive market for Thai investors. He highlighted that, prior to the recent tax-related disruptions, Vietnam's stock index was recognized as one of the most resilient in Southeast Asia. With a GDP growth rate of 7% last year and a projected 8% for this year, Vietnam's economic growth remains appealing compared to its regional counterparts.
In conclusion, the Vietnamese stock market is on the brink of significant changes, with upcoming ETF portfolio restructurings and foreign investor interest signaling a transformative period ahead. As the market adapts to both local and international pressures, the potential for growth and resilience remains strong, making it a focal point for investors seeking opportunities in Southeast Asia.
