The UK-based financial and business information firm FTSE Russell has added Vietnam’s equity market onto its reclassification watchlist, a sign that could help raise the status of the Vietnamese market in the global markets (Photo: tapchitaichinh.vn) Hanoi (VNS/VNA) – Vietnamwas one of three countries added onto FTSE Russell’s watch list for a possiblefuture upwards reclassification.
In its annual country classificationreview published on early September 27, the UK-based data service provider saidVietnam “is currently classified as a Frontier market and is being added to thewatch list for possible reclassification as Secondary Emerging.”
The two other equity markets thatwere also added into FTSE Russell’s watch list were Argentina and Tanzania.
In June, Vietnam’s equity marketfailed to be added into the watch list of Morgan Stanley Capital International(MSCI) for classification review for a possible lift from a Frontier market toan Emerging one.
According to FTSE Russell, Vietnam’sequity market is classified as a lower-middle income, speculative market withrestrictions in some key elements such as fair treatment of minorityshareholders, selective incidence of foreign ownership, free and well-developedforeign exchange market, stock lending, off-exchange transaction and efficienttrading mechanisms.
Vietnam has also missed three FTSERussell requirements on trading settlement, permitted short sales and developedderivatives market.
Among criteria that have been met byVietnam are the quality of market monitoring by formal regulators, sufficientcompetition to ensure high quality custodian services and market deptinformation/visibility and trading report process.
The announcement had been widelyforecast by Vietnamese securities firms. BIDV Securities Co (BSC) recently saidin a report that the Vietnamese market would be put onto the watch list and itwould take one or two years for Vietnam to be upgraded to an emerging market.
“The action of FTSE Russell willhave big impacts on the Vietnamese equity market like pushing the marketregulators to improve and upgrade the market,” BSC said.
“Secondly, investors’ confidencewill get better and their short-term trading strategies may be changed toprepare for the portfolio shake-ups of exchange-traded funds (ETFs).”
Bao Viet Securities JSC (BVSC) saidin a report that FTSE Russell may raise the status of Vietnam’s equity marketin September 2019 if it was able to pass such requirements, and the upgradewould aid the market by drawing more attention from foreign investors.-VNS/VNA
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