Vietnam is striving to upgrade its stock market from frontier to emerging by 2025.
Vu Thi Chan Phuong, Chairperson of the Vietnam State Securities Commission (SSC), stated that improving the status of the stock market is one of the main objectives of the Government. The country hopes to obtain emerging market status before 2025.
Regarding the legal framework, the Securities Law of 2019, the Investment Law of 2020, the Companies Law of 2020 and the documents that guide their application have created optimal conditions for investment flows, have facilitated access to information in English, as well as the registration and opening of investor accounts, and have improved market transparency, thus gradually meeting the criteria for market improvement.
In addition to growing in terms of size and liquidity, Vietnam’s stock market has also become increasingly transparent and healthy thanks to strict resolution of violations. Several companies have also proactively published information in English. Among them, all of the VN30 Index group, which measures the 30 largest securities by market capitalization, have disclosed information in English.
Transparent regulations improve market viability, as seen in Government Decree No. 155/2020/ND-CP and Ministry of Finance Circular No. 96/2020/TT-BTC.
In the coming times, the SSC will review legal documents to improve the transparency and sustainability of the stock market, Phuong said.
Lyndon Chao, representative of the Asian Securities Industry and Financial Markets Association (ASIFMA), said Vietnam is one of the fastest growing Asian economies. It also benefits from the diversification of the global supply chain and a rising middle class.
He said global investors are increasing their investments in Asia, and Vietnam will be a prominent destination in the future as authorities reform the market to facilitate access for global fund managers.
Financial experts point out that MSCI and FTSE Russell, the two most important international organizations in the classification of stock markets, continue to classify Vietnam as a frontier market. Meanwhile, neighboring countries such as Thailand, Indonesia, Malaysia and the Philippines have been designated as emerging markets for years.
He said global investors are increasing their investments in Asia, and Vietnam will be a prominent destination in the future as authorities reform the market to facilitate access for global fund managers.
Many foreign investors see the value of the Vietnamese stock market and want to invest here in the future. What the country must do now is continue to promote market transparency and offer more favorable conditions to foreign investors, according to experts.
If MSCI and FTSE Russell upgrade Vietnam’s stock market to emerging status, billions of dollars are expected to flow into Vietnamese stocks each year.
According to major international rating agencies and financial institutions, the country has made improvements and satisfied many important criteria. However, there are two issues that still need important improvements in support of foreign investors. The improvements include the pre-financing requirement and the foreign ownership limit, which require practical coordination between stakeholders such as the State Bank of Vietnam and the Ministry of Planning and Investment.
Experts also highlighted the importance of broker-dealers and banks, stating that the improvement will contribute to considerably expanding the size of the market, so operating systems and risk management processes must be top-notch to meet the requirements. related to transactions.
In addition, the SSC should continue to perfect the new computer system of the stock market, diversify and improve the quality of market products to attract foreign investors, and develop products related to green growth and sustainable development.
Article republished from the Vietnamese state media VNA within the framework of an agreement between both parties to share content. Link to the original article:https://en.vietnamplus.vn/vietnam-eyes-emerging-stock-market-status-by-2025/269595.vnp
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Source: https://reporteasia.com/mercados/bursatil/2023/10/15/vietnam-aspira-ser-mercado-valores-emergente-2025/
