Vietnam “misses” the opportunity to upgrade to emerging markets, continues to stay on FTSE Russell’s watch list

Vietnam will continue to stay in the frontier market group (Frontier) and be on the emerging market category 2 watchlist. The FTSE re-evaluates the opportunity to officially upgrade Vietnam’s emerging market class 2 in October. 3/2023

In the latest announcement, FTSE Russell still keeps Vietnam in the frontier market group (Frontier). Thus, since September 2018 when it was added to the watch list, up to now, Vietnam has not been upgraded to Second Emerging market (Secondary Emerging market).

According to FTSE Russell, the progress of upgrading Vietnam’s stock market is slower than expected partly due to the impact of the Covid-19 pandemic. At the same time, Vietnam has not yet met the criteria of “Payment Cycle (DvP)” while being classified as “restricted”. This is due to the market practice of performing pre-trade checks to ensure capital availability before executing a trade.

Stemming from this reason, Vietnam’s stock market has not experienced failed transactions, thereby making the criterion “Resolution and costs associated with failed transactions” (also known as is the “rare transaction failure rate) set by the FTSE to “N/A”.

In addition, FTSE Russell believes that Vietnam needs to improve at the account registration stage, in which there should be more favorable mechanisms for foreign investors to trade securities that have run out of room.

Vietnam will continue to remain in the frontier market group (Frontier) and be on the emerging market category 2 watchlist. In March 2023, the FTSE will reassess the opportunity to officially upgrade the emerging market. type 2 of Vietnam.

In a recent announcement, the Ministry of Finance said that the issue of stock market class is one of the major goals being directed. In fact, the market upgrade has been included in the Project “Restructuring the stock market and insurance market to 2020 and orientation to 2025” and the draft stock market development strategy to 2030.

In the past time, the management agency has been making great efforts and determination to promote and shorten the upgrade roadmap of Vietnam’s stock market and have achieved certain results.

Currently, based on the criteria required by the rating agencies, Vietnam has achieved many important criteria, but there are still many criteria that need common determination, close coordination from ministries and agencies. related industries to remove difficulties to help the market be upgraded soon,” the Ministry of Finance informed.

FTSE Russell Rankings at the September 2022 review

Phuong Linh/Market Lifestyle