Vietnam stock market may secure upgrade in Sept next year: broker

By Ta Phu, Hai Yen

Sun, December 8, 2024 | 8:00 am GMT+7

Vietnam’s stock market could achieve an upgrade to emerging market status as early as September next year, forecast Vietcap Securities.

The projection follows Vietcap’s recent discussions with global index provider FTSE Russell regarding a potential upgrade in 2025.

Due to the upcoming holiday season, the evaluation for the upgrade is expected to occur during FTSE Russell’s semi-annual index review in September 2025, the broker noted.

An investor tracks stocks' prices. Photo courtesy of Kinh Te Do Thi (Urban Economy) newspaper.

FTSE praised Vietnam’s implementation of the non-prefunding (NPF) solution, which allows foreign institutions to purchase Vietnamese stocks without the need to show sufficient funds upfront, according to Vietcap.

However, the index provider is assessing the readiness of local brokers to manage potential failed NPF transactions as one of the conditions for the upgrade, it added.

FTSE is working with the State Securities Commission to further align the Vietnamese stock market with international standards though this is not a mandatory requirement for achieving the emerging market status, Vietcap stated.

The discussions cover the establishment of a central counterparty clearing system (CCP), simplification of stock account opening procedures, the launch of a master account mechanism, and trading infrastructure upgrades, particularly order processing capacity.

Vietnam is currently classified as a frontier market and has been on the FTSE emerging market watchlist since 2018. In October, FTSE Russell retained the country on its watchlist for possible reclassification to “secondary emerging” market status.

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