Việt Nam to release seven-tier ownership breakdown this month

Việt Nam to release seven-tier ownership breakdown this month

The planned disclosure reflects broader efforts to implement measurable and credible capital market reforms.

An investor talks to a trader at a trading office in Hà Nội. — VNA/VNS Photo

Việt Nam's securities regulator is expected to publish a detailed breakdown of listed companies' share ownership structures this month, a move that could enhance market transparency and support the country's long-term market upgrade ambitions, according to a recent report by UBS.

The information was disclosed in a report sent to clients following meetings between representatives of the securities watchdog, international financial institutions and investors in Singapore.

According to UBS, the State Securities Commission of Vietnam (SSC) plans to publish shareholder ownership data on its website across seven investor categories: state ownership, strategic investors, insiders and related parties, major shareholders, cross-ownership holdings, restricted shares and free-float shares.

The Swiss bank noted that Việt Nam has studied Indonesia's experience in addressing challenges related to the disclosure of free-float ratios.

UBS said the planned disclosure reflects broader efforts to implement measurable and credible capital market reforms.

The report highlighted significant improvements in market accessibility, noting that the time required for investors to open accounts has been reduced from approximately three-to-six months to just two days.

In addition, most market transactions are now conducted under a non-prefunding mechanism, while trading value in the first quarter of 2026 increased by roughly 50 per cent. UBS also noted that progress in finalising market regulations has accelerated.

Regarding Việt Nam's market upgrade roadmap, UBS cited discussions with regulators indicating that, for the first time, the country has established a formally approved market upgrade plan endorsed by the Government.

According to Vũ Thị Chân Phương, chairwoman of the SSC, FTSE Russell has confirmed Việt Nam's promotion to Secondary Emerging Market status, effective from September 2026.

The country has also set a target of joining the MSCI Emerging Markets Index by 2030.

The Government's roadmap focuses on several major initiatives, including the implementation of omnibus trading accounts, the introduction of a central counterparty clearing mechanism (CCP) and the gradual relaxation of foreign ownership limits.

The report said these measures have already received approval from the prime minister and are being implemented under a defined timetable.

Among them, the rollout of the CCP mechanism is considered the most important near-term milestone, with authorities aiming to put the system into operation in early 2027.

UBS said market participants emphasised several conditions for the successful implementation of CCP, including maintaining the non-prefunding trading mechanism, allowing margin requirements to be processed through securities companies rather than custodian banks and maximising netting efficiency during the clearing process.

Beyond CCP, regulators are continuing to develop other key components of market infrastructure, including straight-through processing systems, securities borrowing and lending mechanisms, omnibus accounts and the financial capacity of securities firms.

According to data cited by UBS, Việt Nam's stock market currently records an average daily trading value of approximately US$1.2 billion, while total market capitalisation reached around $419 billion by mid-May.

According to the report, at certain points during the first quarter of 2025, the country's stock market trading value exceeded that of Singapore and Indonesia, while FTSE Russell's decision to upgrade Việt Nam generated stronger-than-expected interest from international index providers and global investors.

Foreign ownership limits were another main topic. Current regulations cap foreign ownership in commercial banks at 30 per cent. According to views cited by UBS, any changes to this threshold would require legislative amendments rather than administrative decisions alone.

However, the State Bank of Vietnam has allowed four commercial banks participating in restructuring programmes to raise their foreign ownership limits to 49 per cent.

UBS said the move was seen as a positive signal for the country's market-opening process.

The report also addressed capital flows in Việt Nam's stock market. According to UBS, approximately US$2.5 billion in foreign capital has been withdrawn from the market since the beginning of the year. However, that outflow has been offset by around US$3.5 billion in domestic capital.

The bank noted that domestic retail and institutional investors had absorbed the supply from foreign investors, preventing significant market stress.

According to the discussions cited by UBS, foreign fund withdrawals were largely driven by global macroeconomic factors and exchange-rate developments rather than concerns specific to Việt Nam.

Bizhub