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Chris Milliken · · 6 min readVietnam’s market is booming, so why aren’t tech firms listing?
Vietnam’s stock market has hit record highs recently.
Research from Vietnamese fund manager Dragon Capital shows that the average daily trading volume now regularly exceeds US$1.5 billion, with the index having gained 22% in local currency terms and 19% in US dollar terms this year.
But for local tech companies looking to go public, Vietnam’s stock market is rarely the first choice.
An investor looks at stock prices on the screens at a brokerage in Ho Chi Minh City. / Photo credit: Tech in Asia
While places like Hong Kong are seeing an uplift in tech listings, Vietnam still only has a handful. Of the 685 companies listed on the country’s two main bourses – the Ho Chi Minh Stock Exchange and the Hanoi Stock Exchange – fewer than 5% are considered as tech firms.
The upcoming Unlisted Public Company Market (UPCoM) debut of F88, a consumer finance startup, stands out as a rare exception.
Vietnam’s rising market masks a tougher truth: the system isn’t built for tech listings. But reforms are on the table to address that gap.
What’s holding tech listings back?
A mix of outdated listing requirements, regulatory quirks, and structural inefficiencies continues to discourage the very companies the market most needs.
Profits over progress
Vietnamese law requires companies to have had two consecutive years of pre-tax profits and no accumulated losses at the time of listing. They also need a return on equity of at least 5%.
Those are big asks for tech firms, which often prioritize growth before profit. Some of the world’s largest tech companies by market capitalization today were not profitable when they went public.
See also: Vietnam’s AI Hay pits local brains against ChatGPT’s brawn
There has been talk of creating a dedicated bourse for innovative and high-growth enterprises. However, separate exchanges in smaller markets like Vietnam come with their own risks, including liquidity issues, and it may be easier to relax listing requirements for the main bourse instead.
Capped before they start
How Vietnam can turn it around
Limited options
Change a comin’?
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Vietnam’s stock market is hitting record highs, but tech IPOs remain rare. This piece unpacks the structural issues behind the gap and proposes reforms.
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