Home / Economy / Banking & Finance
Vietnam stock market needs upgrading to emerging status soon: PM
Ngoc Thuy 16:16, 2020/07/20
Vietnam’s stock market has been the platform to help firms like Vietcombank, Vinamilk and Vingroup, expand to regional and global stages.

Prime Minister Nguyen Xuan Phuc has urged Vietnam’s stock market authorities to work out measures so that the market can be upgraded to the emerging market status in a near future.

 Prime Minister Nguyen Xuan Phuc addresses a ceremony to celebrate the 20th anniversary of the

establishment of the local stock market. Photo: VGP. 

Such a move would play a significant part in turning Vietnam into a modernized and industrialized country in the next 15 – 20 years, Phuc said at a ceremony marking the 20th anniversary of the establishment of the Ho Chi Minh City Stock Exchange (HoSE) (July 20, 2000 – July 20, 2020) on July 20.

Vietnam is currently in the Frontier Market group, and was added to the FTSE Russell’s watchlist for possible upgrade to Secondary Emerging Market in September 2018. However, after one year of review, Vietnam only met seven out of nine criteria of FTSE.

After 20 years of operation, the local stock market is expected to make breakthroughs to better meet the economy’s demand for mid- and long-term capital, Phuc said.

The stock market, along with the banking system, should be key channels for capital mobilization and supporting the development of the business community, Phuc added.

From two public firms at the inception, the country’s stock market now has over 1,600 enterprises listed on two stock exchanges namely the Hanoi Stock Exchange (HNX) and the HoSE with a combined market capitalization of VND4,000 trillion (US$173 billion) or 65% of the GDP.

Meanwhile, the HoSE, home to the majority of large-caps, makes up nearly 80% of the total market capitalization.

According to Phuc, the government bond market, equalling 20% of GDP, has been essential in mobilizing funds for the state budget and is considered one of the fastest growing bond markets in the region, not to mention the huge potential of the derivatives market launched two years ago.

Phuc expressed his delight that Vietnam’s stock market, despite its relatively young age, has overcome difficulties and challenges arising from major crises at regional and global levels, with the latest being the Covid-19 pandemic.

The stock market has been among a handful with a strong rebound in the region, Phuc added.

Over the last 10 years, total capital mobilized from the stock market reached over VND2,400 trillion (US$103.77 billion), or 14% of total social investment capital. Notably, it has been the platform to help many local enterprises expand to regional and global stages, such as Vietcombank, Vinamilk, or Vingroup, among others.

RELATED NEWS
TAG: Vietnam stock market frontier FTSE Russel Vietcombank Vinamilk Vingroup Nguyen Xuan Phuc HOSE HNX
Other news
10:58, 2020/58/20
Lack of credit culture poses risks to Vietnam bond market: ADB
A credible domestic rating agency is a critical missing jigsaw piece in the orderly development of a healthy sustainable bond market in Vietnam, stated the ADB.
12:32, 2020/32/16
Vietnam finance ministry pushes for speedier privatization of SOEs
Only seven state firms have completed their respective privatization process in the first nine months of 2020.
14:40, 2020/40/15
Vietnam spends over US$752 million on Covid-19 fight
The government has set aside VND12.57 trillion (US$542.2 million) to support 12.65 million people directly hit by the Covid-19 pandemic.
11:39, 2020/39/14
IMF trims Vietnam GDP growth forecast to 1.6% in 2020
The country would remain the only one with positive growth among five major economies in ASEAN, and its economic growth would rebound to 6.7% in 2021.
14:25, 2020/25/13
Stable outlook expected for Vietnamese dong
While Vietnam is at risk of being listed as currency manipulator by the US, such a risk appears low, as the US will likely continue to reduce its dependence on Chinese exports by reorganizing its supply chain with other partners.
09:46, 2020/46/13
Vietnam banking sector to suffer in 2020 before rebounding in 2021
Fitch Solutions expected credit growth to weaken to 7% in 2020 from 13.7% in 2019, but the growth is predicted to pick up to 12% one year later.