MoF sets goal to quadruple foreign investor accounts by 2030

MoF sets goal to quadruple foreign investor accounts by 2030

The government is seeking to broaden foreign participation in its capital markets, with the Ministry of Finance (MoF) setting bold new growth targets for investors.

Under a plan approved on September 12, the MoF aims to raise the number of foreign investor accounts to 200,000 by 2030, quadruple the current figure, with growth of 15 per cent annually thereafter. The initiative forms part of a broader strategy to restructure the investor base and advance the fund management industry.

As of the end of August, foreign investors held approximately 49,000 securities accounts in Vietnam, accounting for less than 0.5 per cent of all accounts in the market. This means the securities sector needs to attract foreign investors to open more than 150,000 new accounts in the next five years.

The number of foreign investor accounts has grown slowly over the past decade. In the last five years alone, they have opened only about 14,000 accounts, averaging 3,000 accounts per year.

To entice foreign investors, the MoF's plan outlines several solutions, such as simplifying administrative procedures and reducing the time required to open accounts, as well as implementing a central counterparty clearing mechanism for spot securities. The plan also includes reviewing and expanding foreign ownership limits in non-essential sectors that do not affect national security.

The diversification of listed products is expected to be carried out throughout the five-year implementation period. The plan encourages public offerings, initial public offering, and the listing of large enterprises and foreign-invested enterprises.

The MoF also aims to improve the quality of domestic individual investors and encourage them to invest through funds to enhance market efficiency, stability, and depth.

The number of investors holding fund certificates is expected to reach 2.5 million in the next five years and increase to 5 million by 2035. The number of investment funds is targeted to reach 500 by 2030 and grow by 25 per cent annually thereafter. The total net asset value of the funds is projected to reach 5 per cent of GDP, and to enter double-digit territory within the next 10 years.

By 2030, domestic individual investors are expected to account for around 70 per cent of market trading volume, while the remaining 30 per cent may come from domestic institutions and foreign investors.

At the Fund Management Industry Development Conference held in March, Vu Thi Chan Phuong, chairwoman of the State Securities Commission (SSC), noted that individual investors still tend to trade independently and prefer to control their own investment activities. She emphasised the need for the investor restructuring plan to ensure market stability and depth.

“The SSC also aims to educate new, non-professional investors who lack the time to closely monitor the market,” Phuong highlighted.

Deputy Minister of Finance Nguyen Duc Chi stated that the securities industry needs to reorient investors from stock trading to stock investing. “We must change the mindset of retail investors so they can entrust their assets and capital to professional fund management companies, based on a foundation of shared interests and risk distribution,” he said.

VIR