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Speaking at VIR's workshop "The Allure of Asset Classes" on November 13, Vu Viet Linh, vice president of institutional research at Maybank Investment Bank, said, “Vietnam has set out a bold 2026-2030 roadmap, targeting 10 per cent annual GDP growth and $1.4 trillion in investment. To that end, Vietnam will need to raise funds both internally and externally. It needs to deepen capital markets, i.e. developing the bond market and getting the stock market upgraded to emerging market status by FTSE and MSCI, building the International Finance Centre, and having its sovereign rating upgraded to "investment grade" by S&P/Fitch.”
“This will materially help to enhance access to global capital markets for Vietnam’s government, banks, and corporates with lower cost-of-funds, attracting more foreign inflows into the country, creating big years for Vietnam’s stock market, which could be bigger and steadier than emerging market upgrade events,” Linh noted.
Vietnam’s sovereign rating has improved over the past decade. A sovereign rating upgrade would signal stronger macro fundamentals, reducing both country and corporate risk premiums. This improved risk profile could attract external capital, support currency stability, and lift equity market performance. Historical case studies reinforce Maybank's thesis: sovereign upgrades often deliver meaningful economic gains, with equity investors benefiting most when positioned from two years before to two years after the upgrade.
According to Fitch, S&P, and Moody’s, Vietnam needs to address institutional weaknesses, elevated banking sector risks, and declining external buffers.
“With regard to institutional strength, we view Resolution 68 and ongoing administrative restructuring as forming the starting point to improve regulatory quality and accountability,” Linh said. “For the banking sector’s vulnerabilities (due to its large size relative to GDP and persistent undercapitalisation), we believe more effective investments and stronger GDP growth in the coming years will materially help to address this, while banks, particularly state-owned banks, are planning to recapitalise already.”
For external buffers, tailwinds from the Fed’s rate cut (towards 3 per cent by end 2026) and Vietnam’s improving business environment will help to attract USD flows back to Vietnam, helping the central bank to restrengthen its foreign reserves.
"Despite uneven progress and lingering challenges, Vietnam is pressing ahead with reforms to tackle key bottlenecks on its path to investment grade. We firmly believe if Vietnam delivers on its ambitious 2026-2030 economic plan, a sovereign upgrade to investment grade will happen," he added.
