New trading system KRX 'not criterion for Vietnam stock market status upgrade'
The new trading system KRX is not a condition required by rating agencies FTSE Russell and MSCI to approve a status upgrade for the Vietnamese stock market, said director of a securities firm.
"However, this is still an important stepping stone for Vietnam's stock market to meet criteria such as "prefunding" with the central counterparty clearing house (CCP) model, the T+0 settlement system (trades in shares are settled on the same day) or short selling", he noted.
The executive, who declined to be named, informed that securities companies and the Ho Chi Minh Stock Exchange (HoSE) have made more than 5,000 hypothetical testing examples.
"The 'testing' of the system is very serious; the exchange and securities companies are trying their best to operate the new system smoothly," he noted.
Meanwhile, a representative of another securities company expressed doubts about the official application of the KRX system. "The testing process still has many errors, and there is no guarantee that serious errors or even data loss will not occur when the system officially runs"
Previously, the State Securities Commission (SSC), the local stock market watchdog, rejected the HoSE’s proposal to operate the KRX system, provided by Korea Exchange, on May 2.
According to the regulator, the HoSE had proposed to the commission the official operation of the KRX system without a report from the Ministry of Finance and the Vietnam Stock Exchange (VNX), and without obtaining the opinions of beneficiary units such as the Hanoi Stock Exchange (HNX) and VSDC.
“This failed to comply with legal regulations stated in Clause 26, Article 4, the Securities Law 2019,” it noted.
The KRX system has not undergone a comprehensive acceptance review involving the investor, the contractor and beneficiary units; as well as obtained the required Level 4 information security approval from the relevant authority per government regulations.
Immediately after receiving SSC's opinion, the HoSE issued a document requesting securities companies to stop implementing the plan to convert to the KRX trading system.
This development has made investors worried about the possibility of having the Vietnamese stock market status upgraded from “frontier” to “emerging”.
The latest report of FTSE Russell in late March showed that Vietnam has met seven out of nine criteria for market status upgrade.
It has yet to meet the “Settlement Cycle (DvP)” criterion, which is currently rated as “Restricted” due to the market practice of conducting a pre-trading check to ensure the availability of funds prior to trade execution, FTSE Russell said in a statement.
By default, the market does not experience failed trades, the “Settlement – costs associated with failed trades” criterion is unrated.
Additionally, FTSE suggested improvements to the process for the registration of new accounts, and the introduction of an efficient mechanism to facilitate trading between non-domestic investors in securities that have reached, or are approaching, their foreign ownership limit (FOL).
Meanwhile, MSCI's report points out nine criteria that Vietnam's stock market had not yet met, including the foreign ownership limit (FOL) level, foreign "room" level, equal rights for foreign investors, foreign exchange market liberalization level, information flow, clearing and settlement, possibility of off-exchange transactions, stock lending, and short selling.
These nine criteria were also mentioned in its June 2021 and June 2022 reports, showing that Vietnam has not made any improvement to satisfy MSCI's requirements in the past two years.
MSCI's report also pointed out two criteria that need improvement: registry and market regulations.
Currently, investors are required to register transactions, and opening an account requires approval from the Securities Depository Center. Many legal documents related to the stock market do not have English versions to facilitate foreign investors’ access.
- Read More
Singapore's Platinum Victory seeks to gain veto at Vietnam’s REE
Singaporean fund Platinum Victory Pte. Ltd. has registered to buy more shares of Ho Chi Minh City-based utility firm Refrigeration Electrical Engineering Corporation (REE) to achieve the vetoing power in the latter.
Finance - Thu, November 21, 2024 | 11:29 am GMT+7
Posco keen on investing in Vietnam's $2.2 bln LNG power project
South Korea’s steelmaker Posco is eyeing to invest in the $2.2 billion Quynh Lap LNG-fired power plant project in Vietnam’s central province of Nghe An.
Energy - Thu, November 21, 2024 | 10:42 am GMT+7
Vietnam firm Hoa Lam to build $212 mln Aeon Mall in Mekong Delta
The Mekong Delta city of Can Tho has accepted a subsidiary of private multi-sector Hoa Lam Group as the investor of the Aeon Mall Can Tho commerce and service center.
Industries - Thu, November 21, 2024 | 10:31 am GMT+7
Vietnam startup expert closes Monkey in Black coffee shop
Tung BT (Tran Thanh Tung), a popular startup expert and social media influencer, is closing his final coffee shop in Ho Chi Minh City, ending a 10-year journey of the "Monkey in Black" brand.
Companies - Thu, November 21, 2024 | 8:16 am GMT+7
Vietnam-Singapore ties set for elevation to comprehensive strategic partnership
Vietnam and Singapore will elevate bilateral ties to a comprehensive strategic partnership and Singaporean Prime Minister Lawrence Wong will visit Vietnam next year.
Politics - Wed, November 20, 2024 | 8:16 pm GMT+7
Vietnam’s Vingroup establishes robotics firms, with co-founder’s 2 sons as major shareholders
Vingroup, Vietnam’s largest private conglomerate by ecosystem, has set up a robotics unit as it moves to ramp up its industrial-high technology ecosystem.
Companies - Wed, November 20, 2024 | 6:17 pm GMT+7
E-commerce, digital platforms likely to pay taxes on behalf of their sellers in Vietnam
E-commerce and digital platforms will have to declare and pay taxes on behalf of their sellers starting January 1, 2025, according to a draft amendment to the Law on Tax Administration.
Finance - Wed, November 20, 2024 | 5:37 pm GMT+7
Flexibility, adaptability key to effective leadership: PepsiCo Vietnam exec
In a rapidly changing world, leaders need to develop the skill of being “as flexible as seaweed,” says Nguyen Viet Ha, general director of PepsiCo Foods Vietnam.
Companies - Wed, November 20, 2024 | 3:52 pm GMT+7
Central Vietnam province okays $88 mln automobile part project
Binh Thuan province's industrial zone authority on Tuesday granted an investment registration certificate to a $88 million project invested by Taiwan’s NeoSCM Limited.
Industries - Wed, November 20, 2024 | 3:44 pm GMT+7
Thai packaging firm Thantawan Industry makes inroad into Vietnam
Thantawan Industry Public Company Limited, a leading Thai manufacturer of premium plastic packaging, has inked a deal for a 30-year factory lease, marking its inaugural investment in Vietnam.
Industries - Wed, November 20, 2024 | 3:34 pm GMT+7
Developer Novaland gets legal hassles cleared for satellite urban area bordering HCMC
Major property developer Novoland has had legal obstacles for its Aqua City project cleared after Dong Nai Chairman Vo Tan Duc approved Tuesday a critical adjustment to the southern province’s urban development plan.
Companies - Wed, November 20, 2024 | 2:29 pm GMT+7
Pegatron to quadruple workforce at $800 mln project in Vietnam
Pegatron Vietnam, a subsidiary of Taiwanese electronics manufacturer Pegatron Corporation, is set to soon quadruple the company's workforce for its $800-million project in Vietnam.
Industries - Wed, November 20, 2024 | 2:03 pm GMT+7
Thailand’s WHA greenlighted to invest $55 mln in central Vietnam industrial park
WHA Group, a leading Thai provider of fully integrated logistics and industrial facilities solutions, has secured in-principle approval from the Vietnamese government to invest in an industrial park in central Vietnam.
Industrial real estate - Wed, November 20, 2024 | 12:01 pm GMT+7
Indonesia, Brazil sign cooperation deals worth $2.65 bln
Indonesia and Brazil on Monday sealed cooperation agreements worth $2.65 billion in the areas of renewable energy, sustainable agriculture and technology at the Indonesia-Brazil Business Forum held in Rio De Janeiro, Brazil, on the sidelines of the G20 Summit.
Southeast Asia - Wed, November 20, 2024 | 11:57 am GMT+7
Nusantara not yet feasible as Indonesia’s capital city: authorities
Indonesian Minister of Home Affairs Tito Karnavian said Jakarta still holds the capital status despite the enactment of State Capital Law No. 3 of 2022, adding that the capital city will officially be relocated after the president issues a presidential decree.
Southeast Asia - Wed, November 20, 2024 | 11:55 am GMT+7
Malaysia’s Halal industry to make up 10.8% of GDP by 2030
Malaysia’s Halal industry is projected to account for 10.8% of the country's GDP by 2030, with an estimated value of RM231.1 billion ($51.7 billion).
Southeast Asia - Wed, November 20, 2024 | 11:48 am GMT+7
- Consulting
-
Remove roadblocks to lure foreign investment into Vietnam: HSBC exec
-
Rethinking resilience: How typhoon Yagi redefines supply chain strategies in northern Vietnam
-
In trade and investment, ASEAN and China are better together
-
AI can be a game changer for Vietnam tourism
-
Investment opportunities in LNG-to-power projects in Vietnam
-
Pepper prices 2024: will the dream of 'black gold' repeat?