In a recently released report, international stock market rating agency FTSE Russell has not upgraded Vietnam’s stock market. FTSE Russell believes that Vietnam needs to continue to maintain its current pace of reform if it wants to achieve its upgrade target next year.
In the recently released October market ranking report, Vietnam is still on the watch list for upgrading to a secondary emerging market.
Report of FTSE Russell said, Vietnam was included waiting list The classification was reviewed from September 2018. To date, the payment cycle (DvP) criterion has been assessed as limited. The criterion "payment - costs related to failed transactions" has not been assessed.
Besides, ranking organization It is required to improve the account opening registration process, facilitating transactions between foreign investors with securities that have exhausted or are near exhaustion of room.
FTSE Russell acknowledged the Vietnamese Government's continued support for market reform. "On 28 February 2023, the Prime Minister specifically committed that the Vietnamese market would remove barriers that could prevent it from meeting the FTSE's criteria for an upgrade to emerging market status by 2025," the report said.
The proposed Non-Prefunding payment model has been adjusted, with the Ministry of Finance recently issuing Circular 68. From November 2, foreign institutional investors can place orders without having to have 100% of the money. This is an important step to untie the “bottleneck” for the market. Vietnam Securities in the process of upgrading.
FTSE Russel is waiting for the next step to concretize this regulation, with more detailed operating regulations from the Vietnam Securities Depository and Clearing Corporation.
“If Vietnam wants to achieve upgrade target by 2025 as set out by the Prime Minister, it is important to maintain the pace of reform. The revised regulations need to be agreed soon, widely communicated, including clearly defining the necessary roles and responsibilities in payment model, as well as implementation roadmap with specific timelines,” FTSE Russell note.
The organization will update Vietnam's pending status at the review in March 2025.
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