Information transparency vital to Vietnam stock market development: official

Transparent information disclosure is a vital base for the sustainable development of the Vietnamese stock market as securities authorities are striving to upgrade its status, said Pham Hong Son, vice chairman of the State Securities Commission (SSC).

“We see transparency as the root for market development and a critical tool to protect corporates, investors, and regulators as well,” Son noted at the conference on upgrading of the stock market status held by The Investor in Hanoi on Tuesday.

To make Vietnam’s stock market more transparent and attractive to both domestic and foreign investors, the SSC, the stock market watchdog, is working hard to enhance information disclosure regulations, which are also a criterion for the status upgrade, he added.

The official admitted that there remained challenges to implementing this requirement as both the SSC and listed companies will have to make more efforts to disclose information in English.

He tipped that foreign investors are interested in pouring more money into Vietnamese shares but they are selective and struggle to find information on the foreign ownership ceiling of the sectors in which the target companies operate.

According to calculations by analysts and stock authorities, Vietnam can attract some $2.5 billion into its stock market annually once the upgrade is achieved.

Addressing the event, Nguyen Anh Tuan, editor-in-chief of The Investor, shared the view that increasing transparency in information disclosure is urgent for the upgrade.

Two prevailing issues needing further work are prefunding and the foreign ownership cap.

Vietnam has met seven of nine criteria set by FTSE Russell and just eight out of 17 set by MSCI. In its latest review last month, FTSE Russell, a subsidiary of the London Stock Exchange Group, kept Vietnam on a watch list for a possible reclassification to secondary emerging market status.

Therefore, Vietnam faces a tough task to achieve the market status upgrade by 2025 as FTSE Russell reviews its classification twice, in March and September, Tuan noted.

* Link to the conference