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 plans to spend over $2 bln on US agri imports

Vietnam plans to spend over $2 bln on US agri imports

Vietnam’s Ministry of Agriculture and Environment is expected to sign MoUs to purchase over $2 billion worth of U.S. agricultural, forestry, and fishery products.

Economy - Tue, June 3, 2025 | 10:01 pm GMT+7

New flight route to help Danang attract more wealthy tourists from Middle East

New flight route to help Danang attract more wealthy tourists from Middle East

The new Dubai-Danang flight route has been launched, paving the way for an influx of high-spending travelers from the Middle East and Europe to the central Vietnam city, one of the country's top tourist attractions.

Companies - Tue, June 3, 2025 | 9:13 pm GMT+7

Food giant C.P. Vietnam’s 'diseased' pigs improperly quarantine-stamped: authorities

Food giant C.P. Vietnam’s 'diseased' pigs improperly quarantine-stamped: authorities

The widely circulated images of diseased pigs from C.P. Vietnam, a subsidiary of Thailand’s food giant Charoen Pokphand Foods Public Company Limited (CPF), date back to 2022, but the pigs were improperly stamped, Vietnamese authorities stated on Tuesday.

Companies - Tue, June 3, 2025 | 5:36 pm GMT+7

Son Hai Group proposes expanding 263km stretch of Vietnam's North-South Expressway

Son Hai Group proposes expanding 263km stretch of Vietnam's North-South Expressway

Vietnam’s Son Hai Group is seeking Prime Minister Pham Minh Chinh's approval to invest in the expansion of a 263-kilometer stretch of the eastern section of the North-South Expressway.

Infrastructure - Tue, June 3, 2025 | 3:53 pm GMT+7

FedEx establishes direct serve in Vietnam on surging demand

FedEx establishes direct serve in Vietnam on surging demand

FedEx Express Corporation, one of the world’s largest express transportation companies, has transitioned to a direct-serve presence in Vietnam amid the Southeast Asian country’s growing international shipping demand.

Industries - Tue, June 3, 2025 | 2:55 pm GMT+7

Vietnam’s steel giant Hoa Phat to deliver thousands of containers to domestic shipping lines  

Vietnam’s steel giant Hoa Phat to deliver thousands of containers to domestic shipping lines  

Vietnam’s largest steelmaker, Hoa Phat Group, will supply thousands of containers to VIMC Container Transport JSC (VIMC Lines) and Vinafco Shipping JSC under recently signed contracts.

Companies - Tue, June 3, 2025 | 12:16 pm GMT+7

Shinhan Bank receives 'Fastest growing SME bank Vietnam 2025' award

Shinhan Bank receives 'Fastest growing SME bank Vietnam 2025' award

South Korea’s Shinhan Bank Vietnam Limited has been named the “Fastest Growing SME Bank Vietnam 2025” by World Economic Magazine (UK).

Companies - Tue, June 3, 2025 | 10:19 am GMT+7

Vietnam’s ‘shrimp king' Minh Phu expects to return to profit in 2025

Vietnam’s ‘shrimp king' Minh Phu expects to return to profit in 2025

Minh Phu Seafood Corporation (UPCoM: MPC), Vietnam’s leading shrimp exporter, expects net profit to reach VND997 billion ($38.03 million) this year, reversing the loss in 2024.

Companies - Tue, June 3, 2025 | 8:38 am GMT+7

CMC Corporation breaks ground on $300 mln technology hub in Hanoi

CMC Corporation breaks ground on $300 mln technology hub in Hanoi

Vietnam's leading technology firm CMC Corporation on Monday broke ground on its $300 million Hanoi CMC Creative Space (CCS Hanoi) project.

Industries - Mon, June 2, 2025 | 11:19 pm GMT+7

Thailand’s industrial output up after 9-month decline

Thailand’s industrial output up after 9-month decline

Thailand’s industrial output has turned positive for the first time in nine months, with the automotive sector rebounding after a 21-month slump, said Thai Deputy Finance Minister Paopoom Rojanasakul.

Southeast Asia - Mon, June 2, 2025 | 10:48 pm GMT+7

Singapore, France to expand cooperation in civil nuclear energy, defence technology, AI research

Singapore, France to expand cooperation in civil nuclear energy, defence technology, AI research

Singapore and France have upgraded their Strategic Partnership signed in 2012 to a Comprehensive Strategic Partnership (CSP), marking Singapore's first CSP with a European country.

Southeast Asia - Mon, June 2, 2025 | 10:47 pm GMT+7

Masan MEATLife stock jumps on continued profit momentum

Masan MEATLife stock jumps on continued profit momentum

The ticker of Masan MEATLife (MML), a subsidiary of Vietnamese consumer retail giant Masan Group, jumped by 8.71% to VND31,200 ($1.2) per share on Monday, after it reported profit for the third consecutive quarter in Q1/2025.

Companies - Mon, June 2, 2025 | 10:34 pm GMT+7

Vietnam's VSIP Binh Dinh industrial park seeks to become 'golden destination' for Thai firms

Vietnam's VSIP Binh Dinh industrial park seeks to become 'golden destination' for Thai firms

The Becamex VSIP Binh Dinh service-urban-industrial complex in the central province of Binh Dinh is emerging as a promising destination for Thai enterprises, said its developer Becamex Binh Dinh JSC.

Industrial real estate - Mon, June 2, 2025 | 10:24 pm GMT+7

Termination of feed-in-tariff mechanism a major bottleneck in Vietnam’s electricity transition: expert

Termination of feed-in-tariff mechanism a major bottleneck in Vietnam’s electricity transition: expert

A major bottleneck in Vietnam’s electricity transition has been the termination of the feed-in-tariff (FIT) mechanism in 2021, with no suitable replacement mechanism in place, according to the director of Hanoi-based Institute of Energy Technology.

Economy - Mon, June 2, 2025 | 4:56 pm GMT+7

Vietnam Vaccine JSC launches high-quality healthcare shop chain

Vietnam Vaccine JSC launches high-quality healthcare shop chain

Vietnam Vaccine JSC (VNVC), well known for its vacciation services, on Saturday launched its VNVC Shop, a chain offering safe, high-quality healthcare products from globally recognized brands.

Companies - Mon, June 2, 2025 | 4:05 pm GMT+7

Vietnam heavyweight PV Gas plans $3 bln investment over next 5 years

Vietnam heavyweight PV Gas plans $3 bln investment over next 5 years

PV Gas, a subsidiary of state-owned giant Petrovietnam, plans to make "strong investment" over the next five years in areas such as infrastructure and import-distribution of LNG.

Energy - Mon, June 2, 2025 | 2:01 pm GMT+7