Continuing to “miss the appointment”, FTSE Russell is concerned about Vietnam’s progress in upgrading emerging markets

FTSE Russell said it will probably review Vietnam’s membership in the watch list for upgrading emerging markets type 2 at the next review period in September 2023.

In the latest announcement, FTSE Russell has kept Vietnam in the frontier market group (Frontier) and continues to be on the watch list for upgrading to the second emerging market (Secondary Emerging market) since September. 2018.

According to FTSE Russell, Vietnam has not yet met the “Payment Cycle (DvP)” criterion 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. In addition, the registration process for opening a new account needs to be further improved as current procedures can lead to a longer registration period and more favorable mechanisms for investors are needed. Foreign investors trading securities has run out of room.

As of September 2022 to the present, the FTSE Russell has been unable to establish clear progress towards the central clearing partnership (CCP) model, despite ongoing discussions between regulators. market management and member markets. The trial run of the new trading system started in February 2023 and will take place in about 40 days between the Vietnam Securities Depository (VSD) and its members. In addition, the introduction of Non-Voting Depository Certificates (NVDRs) has begun, with the aim of allowing foreign investors to trade securities without worrying about ownership limits. foreign ownership.

FTSE Russell said it continues to maintain constructive relationships with the State Securities Commission (SSC), the World Bank (WB), Ernst & Young and other important market authorities – institutions are supporting the broader market reform process. “Completing the roles and responsibilities of the subjects in the CCP model, including the implementation of new legal documents, is an important step. Clear guidelines on the timeframe will be supported by foreign investors,” the FTSE Russell text states.

In particular, the FTSE Russell highlighted concerns regarding the lack of clarity on the timing of market reforms. If this is still unclear or the implementation time is prolonged, FTSE Russell said it may reconsider Vietnam’s membership in the watchlist for upgrading emerging market category 2 in the review period. The next one will take place in September 2023.

Phuong Linh/Market Lifestyle