Home / Economy / Banking & Finance
Vietnam's stock market accessibility set to improve with new changes: MSCI
Ngoc Thuy 06:26, 2021/06/15
The local stock market is expected to be upgraded to the emerging status by 2022.

A number of laws that came into effect at the start of 2021 in Vietnam are expected to set the legal basis for further market developments.

World’s major largest index provider Morgan Stanley Capital International (MSCI) gave the view in its 2021 Global Market Accessibility Review, which covers market accessibility assessments for 83 markets.

 Investor at a securities company. Photo: Cong Hung

According to the MSCI, the restructuring of the two Vietnamese exchanges [Ho Chi Minh City Stock Exchange and Hanoi Stock Exchange] into a single Vietnam Stock Exchange (VSE), the establishment of the Vietnam Securities Depository and Clearance Corporation (VSDC), or Non-voting Depository Receipts may potentially improve market accessibility once these policies are implemented.

The MSCI also pointed out the fact that the Ho Chi Minh City Stock Exchange (HOSE) in Vietnam has been impacted by capacity limitations in its trading system since 2021.

This has resulted in trade execution difficulties on days with relatively high trading volumes, in turn prompting exchange and the regulators to work on short-term and long-term solutions to address this issue.

“MSCI will continue to monitor these developments closely,” it noted.

Expectation to be upgraded to emerging market by 2022

 MSCI's assessment on frontier markets. Source: MSCI

While pointing out to positive improvements of the market, the MSCI noted there have been no significant development that could result in any rating changes. 

The MSCI referred to a number of fields that should be addressed, ranging from foreign ownership limit subject to certain conditional and sensitive sectors, no offshore currency market and constraints on onshore currency market, lack of stock market information in English, or off-exchange transactions and in-kind transfers requiring prior approval from the State Securities Commission of Vietnam.

The rating agency is scheduled to announced the annual market classification of stock markets globally, including Vietnam, on June 25.

Bao Viet Securities Company (BVSC) in a note said while market upgrade would be an irreversible trend and in line with Vietnam’s efforts in global economic integration, it is unlikely that the market could be upgraded in this review.

Sharing the same view, SSI Securities Corporation (SSI) said the chance is higher for the stock market to realize its goal of becoming an emerging one by the next review in 2022.

RELATED NEWS
TAG: Vietnam MSCI stock market Emerging market frontier market HOSE
Other news
14:44, 2022/44/17
Vietnamese banks urged to tighten lending in real estate, securities
Credit should be channeled to priority fields and production/business activities with positive impacts on socio-economic development.
22:37, 2022/37/13
Digital-first strategy to be focus among Vietnam’s banks and fintech by 2025
The Vietnam Open Innovation Landscape 2021 Report was launched on January 13.
12:30, 2022/30/13
Stocks sale annulment of FLC Chairman necessary to maintain market order: SSC
FLC Chairman Trinh Van Quyet is subject to the heaviest penalty for failing to notify stock market authorities before selling his FLC shares.
03:31, 2022/31/12
M&A in Vietnam’s technology sector to boom in 2022
Mergers and acquisitions (M&A) in Vietnam’s technology sector have made a strong breakthrough.
11:44, 2022/44/11
ADB, TPB join hands to finance women-led SMEs in Vietnam
The grant will improve Tien Phong Commercial Joint Stock Bank's capacity to lend to women-owned and led small and medium-sized enterprises, hire staff, and promote its services to female borrowers.
17:05, 2021/05/30
Banking sector to lower lending rates in 2022: Deputy Prime Minister
The banking sector is expected to tighten credit into risky fields, including real estate and securities.