Stock market upgrade will help Vietnam lure another 10 billion USD in investment. - Illustrative image (Photo: VNA)Hanoi (VNA) – The elevation of the stock market to "emerging" status can help Vietnamattract an additional 10 billion USD in both direct and indirect investment, KBVietnam Securities JSC (KBSV) reported, citing the World Bank (WB).
KBSV experts said if Vietnam is classified by FTSE Russell as a secondaryemerging market, it may gain 0.7-1% in the FTSE Emerging Index, thus helpingthe Vietnamese stock market lure between 800 million USD and 1 billion USD in newinvestments from exchange-traded funds (ETFs).
Nearly10 years after starting the stock market upgrade process, Vietnam is currently inthe final stages of completing the remaining criteria to be upgraded to anemerging market. This will bring benefits in many aspects to the market,especially in terms of credibility and the ability to attractforeign capital inflows.
Currently,there are three rating organisations in the world evaluating and classifyingthe market, FTSE Russell, MSCI, and S&P Dow Jones. Vietnam is now inthe frontier market group and accounts for a large proportion of the indexes oforganisations, 37%, 29%, and 12.3% respectively for the FTSE Frontier Index Series,MSCI Frontier Markets Index, and S&P Frontier BMI. In addition, the country has been included inthe watch list for upgrading to emerging market status by FTSE Russell since2018 and is monitored and evaluated annually by MSCI and S&P Dow Jones.
Vu Chi Dung, head of the International Cooperation Department under the StateSecurities Commission, said that upgrading the stock market will be asignificant signal to the international community, demonstrating that Vietnamis on track to develop into a market economy in its true nature.
As a result, theperspective of international investors on the investment and businessenvironment in Vietnam will become more positive, Dung added.
This will also helpincrease the number of institutional and major investors, thereby promoting professionalismand sustainability in investment activities and, in turn, reducing marketvolatility caused by the psychological impact of a large number of individual investors,he noted.
According to KBSV, Vietnamis closer to an opportunity of being officially considered for an upgrade byFTSE Russell.
The firm expects that the earliest roadmap for Vietnam'sstock market upgrade announcement could be in September this year and anofficial upgrade by FTSE Russell in the assessment period one year later./.
