What criteria does the Vietnamese stock market lack to be upgraded?

According to FTSE Russell, Vietnam has not met many criteria such as Payment Cycle (DvP), “Clearance, cost of transaction failure”, or need to improve at the stage of account registration.

The latest announcement of FTSE Russell said that Vietnam will remain in the frontier market group (Frontier) and continue to be on the watch list of secondary emerging markets (Secondary Emerging market).

According to FTSE Russell, Vietnam has been included in the category 2 emerging market watch list since September 2018, with progress somewhat slower than expected due to the impact of the COVID-19 pandemic.

In addition, Vietnam has not yet met the “Payment Cycle (DvP)” criterion when it is being classified as “limited” because the authorities have stepped up pre-checking of transactions to ensure financial conditions when the transaction is made. Since then, there has been no failed transaction appearing on the Vietnamese market, so the criterion “Clearing, costs when a failed transaction occurs” is also rated “N/A” by the FTSE. .

Not only that, FTSE believes that Vietnam needs to improve at the stage of account registration, in which there should be more favorable mechanisms for foreign investors to trade stocks that have run out of room.

Thus, Vietnam will continue to remain in the frontier market group (Frontier) and be on the watch list of emerging markets type 2. FTSE re-evaluates the opportunity to officially upgrade Vietnam’s emerging market class 2. South in March 2023.

The FTSE said it continues to maintain constructive relationships with the State Securities Commission, the World Bank Group and Ernst & Young, which are supporting the reform program for the market.

In a recent announcement, the Ministry of Finance considers the issue of upgrading the stock market as 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.

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

According to Huu Bon/Investors