Dragon Capital: Vietnam’s Market Upgrade Could Trigger a Wave of Major IPOs

Vietnam may see billions in foreign capital and a flurry of high-profile listings if upgraded to emerging market status, Dragon Capital says.

In a recent report, Dragon Capital highlighted that Vietnam’s stock market could be upgraded by FTSE Russell as early as September 2025, with the change potentially taking effect in March 2026. The upgrade would not only unlock billions of dollars in foreign capital inflows but also pave the way for a surge in initial public offerings (IPOs) — an often-overlooked benefit of achieving emerging market status.

Regulatory Reforms Pave the Way

Dragon Capital pointed to strong signals of progress driven by Vietnam’s regulatory reforms. A key breakthrough is the elimination of the pre-funding requirement for foreign institutional investors, addressing a long-standing bottleneck.

Additionally, the KRX trading platform, launched in May 2024, aims to enhance trading speed and settlement reliability. The State Securities Commission (SSC) has also worked closely with brokerages to standardize market operations, implement a new definition of investor identification, and introduce digital documentation protocols, custodial member roles, and fractional share management.

Other ongoing initiatives include: Electronic communication platforms between brokerages and custodian banks; A consolidated account framework to simplify foreign investor transactions; Enhanced trade allocation procedures; And a central counterparty clearing (CCP) system expected by 2026.

IPO Boom on the Horizon

Beyond the influx of foreign funds, Dragon Capital emphasized a key benefit of market reclassification: a significant boost to IPO activity. When markets are upgraded to emerging status, they typically see a surge in listings as both governments and private companies look to capitalize on greater investor appetite and stronger valuations.

“An upgrade often leads to higher valuations and stronger demand, prompting company owners to view it as an ideal time to go public,” Dragon Capital noted.
In Vietnam’s case, the upgrade could encourage local unicorns and major state-owned enterprises (SOEs) to launch IPOs, capitalizing on demand from foreign investors previously restricted from frontier markets.

The government’s privatization agenda could also gain momentum, with stakes in SOEs sold via public markets. Meanwhile, large private-sector players—particularly in tech and retail—may consider IPOs to fund expansion, reassured by the increased capacity of the upgraded market to absorb large deals.

Enhanced Global Visibility and Capital Access

Being classified as an emerging market also brings greater credibility and visibility. Companies listed in such markets automatically draw attention from global institutional investors and emerging market funds, many of which are restricted from investing in frontier markets.

This shift could attract international investment banks to underwrite deals in Vietnam, elevating the quality and scale of IPOs. Vietnam has seen relatively few major IPOs in recent years, but that may change soon.

“Several blockbuster IPOs have been on hold, awaiting improved conditions,” Dragon Capital noted. “An upgrade could unlock these opportunities.”
Recent activity already hints at renewed momentum: Vinpearl listed in May, while TCBS and F88 are preparing to go public. Further ahead, IPOs could emerge from big names like THACO AUTO, Bach Hoa Xanh, Golden Gate, Highlands Coffee, VPS, Viettel IDC, Misa, VNPay, and Long Chau.

According to Dragon Capital, Vietnam could see up to $47 billion in IPO activity over the next three years.

Market Depth and Policy Support

A deeper and more diverse market — with more large-cap listings in key sectors — would help maintain or increase Vietnam’s weight in emerging market indices. To support this, policymakers may actively promote IPOs from major state banks, telecoms, and corporate subsidiaries.

Vietnam has set an ambitious target to raise its market capitalization to 100% of GDP by 2025. Dragon Capital believes that achieving this will require both market appreciation and a wave of new listings — and that an upgrade could serve as the catalyst.

“While a market upgrade doesn’t guarantee a wave of IPOs, it creates the right conditions — higher demand, better valuations, and greater investor confidence,” the report concluded.
“We should expect regulators to leverage this opportunity to accelerate Vietnam’s listing pipeline.”

Related

Source: Vietnam Insider