MSCI recognizes transferability improvement on Vietnam’s stock market

Vietnam has improved share transferability on the back of increased uptake for off-exchange and in-kind transactions following regulation changes, global index provider MSCI has said.

In addition, Vietnam is continuing to work on market development plans to address certain accessibility issues, such as foreign ownership limits, prefunding requirements, and the lack of English disclosure of market information.

MSCI plans to closely monitor the progress of these reforms, the firm noted in its latest global market accessibility review.

However, Vietnam, which is seeking to upgrade its stock market status from a frontier to an emerging market, still needs to meet eight criteria to complete the 18-criterion needed for the elevation.

They are foreign ownership limit level, foreign room level, equal rights for foreign investors, foreign exchange market liberalization level, investor registration and account set up, market regulations, information flow, and clearing and settlement.

Prime Minister Pham Minh Chinh in February asked government agencies – the Ministry of Finance, State Securities Commission, State Bank of Vietnam, and Ministry of Planning and Investment – to coordinate efforts and remove hurdles to the upgrade under global index providers MSCI and FTSE Russell in 2025.

Once upgraded from “frontier” to “emerging” by these global index providers, Vietnam ccould attract international investments of $25 billion by 2030, the World Bank estimated in April.

Last Friday, the State Securities Commission met with major securities firms to discuss measures to remove barriers for foreign investors participating in the Vietnamese stock market.

FTSE Russell, a major global index provider, in March kept Vietnam on its watch list for possible reclassification to a secondary emerging market.