Stock market poised for boost in variety with new IPO wave

Stock market poised for boost in variety with new IPO wave

This revitalisation is expected to enhance the market's offerings despite the likelihood that net capital flows will be absorbed in the short term.

Traders work at a securities firm in Hà Nội. — Photo vietnamplus.vn

The Vietnamese stock market is gearing up for a significant influx of quality assets as the country embarks on its third wave of Initial Public Offerings (IPOs). 

This revitalisation is expected to enhance the market's offerings despite the likelihood that net capital flows will be absorbed in the short term.

Historically, Việt Nam’s stock market has witnessed two notable waves of IPO activity, driven by different motivating factors. 

The first wave occurred in 2007 when the market saw a peak of 63 companies going public, raising a combined value of US$2.55 billion.

It was largely fuelled by the equitisation and divestment of State-owned enterprises (SOEs), including prominent firms such as Vietcombank, Vietnam Insurance Corporation, Petrovietnam Fertiliser and Chemicals Corporation and PVI Holdings.

The second surge, spanning from 2017 to 2018, is remembered as the golden era for IPOs, characterised by the significant divestments of large SOEs, such as PV Power, PV Oil and Binh Son Refining and Petrochemical JSC, and the rise of major private-sector players like Vinhomes and Techcombank. 

Following a prolonged lull, IPO activity has returned in full swing this year with a diverse range of companies preparing to enter the market across various sectors, including consumer goods, financial services, technology and real estate.

According to VNDirect Securities, seven key drivers are propelling this resurgence in IPO activity: a stable macroeconomic environment, a loose domestic and international monetary policy, the upgrade of Việt Nam to secondary emerging market status by FTSE Russell, enhanced regulatory frameworks for better corporate governance, the resolution of foreign ownership limits, improved regulations on SOE divestment and streamlined IPO procedures.

Head of Research and Development at Yuanta Securities Nguyễn Thế Minh noted that while the years 2022 to 2024 saw limited major transactions, the ongoing wave of new IPOs and upgrades from UPCoM to the Hochiminh Stock Exchange (HoSE) was bolstering the number of large-cap stocks available to investors. 

This increased stock variety was expected to alleviate the influence of dominant sectors such as banking and finance on the overall market index.

Upcoming IPO activity is anticipated to be further energised by Government resolutions aimed at promoting private sector development and diversification of financing sources, as well as simplified procedures that protect investor rights post-IPO. 

Notably, Decree 245/2025/ND-CP has introduced significant reforms to expedite the IPO process, reducing the waiting period for stocks to begin trading from 90 days to 30 days after approval.

The prospect of market upgrades also serves as a critical catalyst for firms considering listing. 

As Việt Nam’s stock market elevates its status, concerns that listing would not yield long-term capital have dissipated, encouraging more companies to pursue public offerings.

As the current wave of IPOs aims to both improve the availability of listed goods and mitigate the financial dominance of specific sectors, the Vietnamese stock market is poised for a transformative period of growth, according to Minh.

Investors and market participants are urged to stay informed as these developments unfold, potentially leading to increased liquidity and diversified investment opportunities within the country's flourishing financial landscape. 

Bizhub