Speed up plan for stock market status upgrade: PM

Prime Minister Pham Minh Chinh has asked the Finance Ministry to identify measures for ensuring an upgrade in Vietnam’s stock market status to “emerging market” from “frontier market” in order to lure more foreign investment into the country.

In a post-Lunar New Year dispatch Thursday, the PM ordered the ministry to coordinate efforts with the Ministry of Planning and Investment and the State Bank of Vietnam to quickly remove bottlenecks under their jurisdictions to facilitate the upgrade.

The finance ministry must report on the progress by June 30, the dispatch said.

At a press meet on January 19, Deputy Minister of Finance Nguyen Duc Chi had identified the stock market status upgrade and operation of a new trading system, KRX, of the Ho Chi Minh Stock Exchange as two priorities for the ministry.

The ministry and the State Securities Commission, the country’s stock market watchdog, need to consider well all risks and manage them once the upgrade is secured, Chi said.

At a regular cabinet meeting on February 1, Chi noted that the ministry was working to fix the pre-funding and foreign ownership limit issues raised by international index providers in order to secure the upgrade.

Vietnam has been included on the FTSE Russell watch list for upgrading to a secondary emerging market since 2018, but not on MSCI, a New York City-based provider of equity indices.

BIDV Securities JSC (BSC) researchers last month anticipated the stock market upgrade by FTSE Russell in September 2024 or March 2025. They said the MSCI may put Vietnam on its watch list in June 2025 and upgrade the status three months later.

Once FTSE decides to elevate Vietnam’s status, the Vietnamese stock market is forecast to receive $1.3-1.5 billion in investments from open-ended funds and exchange-traded funds (ETFs) that track FTSE’s underlying indices. The amount would be $3.5-4 billion if MSCI follows suit, analysts have said.