Vietnamese stocks can attract additional $25 bln with market status upgrade: WB

By Quang Minh
Thu, February 29, 2024 | 4:13 pm GMT+7

International investors can pour an additional $25 billion into Vietnam’s stock market by 2030 if its status is upgraded from frontier market to emerging market, says a World Bank expert.

Ketut Ariadi Kusuma, senior financial sector specialist with the WB, said at a conference in Hanoi Wednesday that the potential could be unlocked when the status upgrade was made by two global index providers FTST Russell and MSCI.

Ketut Ariadi Kusuma, senior financial sector specialist at Finance & Markets Global Practice, World Bank, speaks at a Hanoi conference on developing Vietnam’s stock market, February 28, 2024. Photo courtesy of the government's news portal.

Ketut Ariadi Kusuma, senior financial sector specialist at Finance & Markets Global Practice, World Bank, speaks at a Hanoi conference on developing Vietnam’s stock market, February 28, 2024. Photo courtesy of the government's news portal.

The WB specialist said he supported Vietnam’s approach in getting the upgrade from FTSE Russell first, but noted that the larger portion of additional foreign investment was likely to come from a similar action by MSCI.

He said Vietnam should work on loosening its current foreign ownership limit (FOL) and pushing further its SOE privatization process. He suggested specific measures including improving information disclosure, widening access to stocks that have nearly reached their FOL, and raising the FOL.

If the FOL remains a bottleneck, Vietnam’s fresh net investment flow could be as low as $5 billion because Vietnamese constituents would account for less than 1% of the global Emerging Market index, he said.

He estimated that the country could attract an additional $8-15 billion in investments if the FOL issue was dealt with radically.

The specialist also recommended that Vietnam develop a domestic investor base, including diversification of investments by the Vietnam Social Security (VSS) fund into corporate securities. A modest allocation of VSS investment in corporate securities would trigger an inflow of billions of U.S. dollars into the corporate sector, he said.

Kusuma also noted that overall reforms in the pension sector can result in attracting investments of $25 billion in companies by 2030.

What’s more, reforms in the insurance and investment fund industry could direct another $28 billion or so to local companies via the capital market.

Increased investment demand in Vietnam also indicates the need for high-quality financial products, particularly shares and corporate bonds. This, in turn, stresses the importance of a sound ecosystem that embraces close monitoring, clear information disclosure and reliable credit rating.

Johan Nyvene, CEO of Ho Chi Minh City Securities JSC, suggested that listed companies in sectors that are not subject to foreign ownership restrictions can proactively have registration details changed to increase their FOL.

Johan Nyvene, CEO of Ho Chi Minh City Securities JSC, speaks at a Hanoi conference on developing Vietnam’s stock market, February 28, 2024. Photo courtesy of the government's news portal.

Johan Nyvene, CEO of Ho Chi Minh City Securities JSC, speaks at a Hanoi conference on developing Vietnam’s stock market, February 28, 2024. Photo courtesy of the government's news portal.

Nyvene also suggested that Vietnamese authorities remove the existing pre-funding requirement, saying this would make Vietnam more attractive to foreign investors and make the market status upgrade more feasible.

Citing criteria set by MSCI and FTSE Russell, Nyvene recommended that Vietnam make improvements related to liquidity, transparency and corporate governance standards; infrastructure development and related financial services; and education of investors.

Comments (0)
  • Read More
Vietnam’s inconsistent legal framework poses problems for FDI sector: Deep C exec

Vietnam’s inconsistent legal framework poses problems for FDI sector: Deep C exec

Vietnam’s legal framework lacks consistency and the foreign direct investment (FDI) sector will soon face challenges related to the Law on Environmental Protection, Bruno Jaspaert, CEO of Deep C Industrial Zones, has said.

Economy - Tue, November 19, 2024 | 6:30 pm GMT+7

Vietnam shares sink on extended foreign selloffs

Vietnam shares sink on extended foreign selloffs

Vietnamese equities fell for a fourth consecutive day on Tuesday as foreign traders extended their selling spree.

Finance - Tue, November 19, 2024 | 5:10 pm GMT+7

Germany’s household product firm QuickPack to invest $32 mln in Vietnam

Germany’s household product firm QuickPack to invest $32 mln in Vietnam

Germany’s QuickPack, a specialist for household goods and hygiene products, will invest €30 million ($31.8 million) in Vietnam’s Mekong Delta province of Long An.

Industries - Tue, November 19, 2024 | 4:24 pm GMT+7

Malaysian millionaire willing to invest in convicted Vietnamese tycoon’s property project: lawyers

Malaysian millionaire willing to invest in convicted Vietnamese tycoon’s property project: lawyers

Malaysian millionaire Vincent Tan has evinced investment interest in a residential project owned by convicted tycoon Truong My Lan, chairwoman of Van Thinh Phat Group, lawyers for the latter have disclosed.

Real Estate - Tue, November 19, 2024 | 4:17 pm GMT+7

‘Bottleneck of bottlenecks’ continues to dog Vietnam's property, infrastructure projects

‘Bottleneck of bottlenecks’ continues to dog Vietnam's property, infrastructure projects

Limited consultations between state agencies and the parliament’s primary focus on wording are issues with Vietnam’s legal framework adversely affecting property and infrastructure projects, say experts and corporate leaders.

Economy - Tue, November 19, 2024 | 3:40 pm GMT+7

President Xi Jinping hastens construction of 3 Vietnam-China rail routes

President Xi Jinping hastens construction of 3 Vietnam-China rail routes

Chinese President Xi Jinping has called for more substantial cooperation between China and Vietnam, including the pacier implementation of three railway routes linking the two nations.

Infrastructure - Tue, November 19, 2024 | 3:08 pm GMT+7

Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnam developers offer deferred principal payments, interest support to boost year-end sales

Vietnamese housing developers are offering several incentives including deferred principal payments and interest support to stimulate demand and boost liquidity as the year nears its end.

Real Estate - Tue, November 19, 2024 | 2:29 pm GMT+7

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia's EQ Resources acquires TMG Group with Vietnam-based ferrotungsten factory

Australia-based EQ Resources Limited has acquired its fellow firm Tungsten Metals Group (TMG), which owns and operates the largest ferrotungsten (FeW) factory outside China.

Companies - Tue, November 19, 2024 | 11:00 am GMT+7

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities becomes largest broker in Vietnam by capital base

Techcom Securities JSC (TCBS) has become the largest securities company in Vietnam by charter capital after finishing a rights offering last week.

Finance - Tue, November 19, 2024 | 9:11 am GMT+7

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam airport operator ACV looks to better exploit non-aviation service potential: exec

Vietnam's airports operator ACV expects to earn $145 million from non-aviation services this year, accounting for around 18.83% of its total revenue, which is modest compared to other countries, said deputy general director Nguyen Duc Hung.

Companies - Tue, November 19, 2024 | 7:45 am GMT+7

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

The Investor to host seminar on removing legal bottlenecks for infrastructure, property investment

A seminar themed “Removing legal bottlenecks for infrastructure and property investment” will be organized by The Investor in Hanoi on Tuesday.

Companies - Tue, November 19, 2024 | 7:00 am GMT+7

Indonesia promises Asia-Pacific investors more incentives

Indonesia promises Asia-Pacific investors more incentives

Indonesian President Prabowo Subianto recently told the press that he will create more incentives and expand special economic zones (SEZs) so as to lure investors from Asia-Pacific.

Southeast Asia - Mon, November 18, 2024 | 11:01 pm GMT+7

Indonesia, Brazil enhance aviation cooperation

Indonesia, Brazil enhance aviation cooperation

Indonesia's state-owned aircraft manufacturer, Dirgantara Indonesia (DI), and Brazilian aerospace company Embraer have signed a memorandum of understanding (MoU) to expand collaboration in the commercial aviation sector.

Southeast Asia - Mon, November 18, 2024 | 11:00 pm GMT+7

Indonesia eyes to become member of BRICS

Indonesia eyes to become member of BRICS

Indonesian President Prabowo Subianto has shown his country’s desire to become a member of the BRICS - the alliance of major emerging economies initiated by Brazil, Russia, India, China, and South Africa.

Southeast Asia - Mon, November 18, 2024 | 10:57 pm GMT+7

Former Party chief, chairman of Vinh Phuc province face disciplinary action

Former Party chief, chairman of Vinh Phuc province face disciplinary action

Vietnam’s Central Inspection Committee has proposed disciplining Pham Van Vong, former Party chief of Vinh Phuc, and Phung Quang Hung, former chairman of the northern province, for violations related to Phuc Son Group.

Politics - Mon, November 18, 2024 | 9:17 pm GMT+7

Shaping a waterway into a key shipping channel: Viconship gets dredging nod

Shaping a waterway into a key shipping channel: Viconship gets dredging nod

A major dredging project will allow safer ship navigation and increased cargo transportation capacity on the Hai Phong shipping channel, thereby enhancing competitiveness of Vinconship’s port system, says the company.

Companies - Mon, November 18, 2024 | 7:08 pm GMT+7