Oct 01, 2019 / 11:14
Vietnam projected to be upgraded to Secondary Emerging by 2020: Brokerage
Addressing the two remaining prerequisites for reclassification only requires a new decree or circular issued by Ministry of Finance, instead of going through many processes subject to approval from the National Assembly.
Vietnam may be upgraded by global provider of financial services FTSE Russel in the 2020 review period, after being retained on watch list for possible reclassification in this year review, according to Bao Viet Securities Company (BVSC).
Following this year’s assessment, Vietnam was unable to gain the nod for moving to Secondary Emerging, due to the country’s stock market having not made any significant improvement since being included in the list of upgrades in the September 2018 review.
“Additional improvements are sought with regard to the registration of new accounts where market practice can extend the registration process and also the introduction of an efficient mechanism to facilitate trading in securities that have reached, or are approaching, their foreign ownership limit between non-domestic investors,“ stated FTSE in a statement.
FTSE also said there has been constructive interaction with the Vietnam market authorities over the last twelve months, and recognized Vietnam’s efforts to develop and improve the capital market.
Currently, Vietnam has only met seven out of nine prerequisites for a reclassification, in which two criteria that need to be improved are "Settlement – Rare incidence of failed trades" and "Off-exchange transactions permitted".
FTSE also explained why "Off-exchange transactions permitted" remains at "Restricted", due to the requirement of fund availability before trade execution, as guided in Circular 203/2015/TT-BTC. Notably, this is also the reason that "Settlement – Rare incidence of failed trades" was downgraded from "Pass" to "N/A" in the March 2019 interim country classification review.
BVSC expected that overcoming this factor is crucial for Vietnam to be upgraded in the next review. As this would be a guide in a circular, the changes will not go through many processes and take a lot of time as the amended Securities Law requires National Assembly approval.
Therefore, FTSE’s announcement reinforces the idea that Vietnam may be upgraded by FTSE in the 2020 review period because at that time, the amended Securities Law would likely have been approved while defects identified by FTSE during this review period can be mended by a new decree or circular issued by Ministry of Finance, stated BVSC.
Illustrative photo.
|
“Additional improvements are sought with regard to the registration of new accounts where market practice can extend the registration process and also the introduction of an efficient mechanism to facilitate trading in securities that have reached, or are approaching, their foreign ownership limit between non-domestic investors,“ stated FTSE in a statement.
FTSE also said there has been constructive interaction with the Vietnam market authorities over the last twelve months, and recognized Vietnam’s efforts to develop and improve the capital market.
Currently, Vietnam has only met seven out of nine prerequisites for a reclassification, in which two criteria that need to be improved are "Settlement – Rare incidence of failed trades" and "Off-exchange transactions permitted".
FTSE also explained why "Off-exchange transactions permitted" remains at "Restricted", due to the requirement of fund availability before trade execution, as guided in Circular 203/2015/TT-BTC. Notably, this is also the reason that "Settlement – Rare incidence of failed trades" was downgraded from "Pass" to "N/A" in the March 2019 interim country classification review.
BVSC expected that overcoming this factor is crucial for Vietnam to be upgraded in the next review. As this would be a guide in a circular, the changes will not go through many processes and take a lot of time as the amended Securities Law requires National Assembly approval.
Therefore, FTSE’s announcement reinforces the idea that Vietnam may be upgraded by FTSE in the 2020 review period because at that time, the amended Securities Law would likely have been approved while defects identified by FTSE during this review period can be mended by a new decree or circular issued by Ministry of Finance, stated BVSC.
Other News
- Regional, international financial centers mean boosters to Vietnamese economy: Deputy PM
- IFC sets record with US$1.6 in climate financing to support Vietnam’s green transition
- Vietnam's credit growth up 10% in 10 months
- Building Hanoi's smart city with smart banking
- Vietnam stock market clears major legal hurdle to potential upgrade
- Cashless parking in Hanoi: Good model fuels smart transport
- Banking sector dominates Vietnam’s corporate bond market
- Prime Minister expects lending to grow by 15% this year
- Vietnam, Singapore strengthen partnership in stock exchange operations
- HSBC raises Vietnam’s GDP growth forecast to 6.5% in 2024
Trending
-
Hanoi holds grand ceremony for 80th anniversary of Vietnam People's Army
-
Vietnam news in brief - December 22
-
Wandering around Hoan Kiem District via young singer's music video
-
Vietnam Defense Expo 2024 secures $286.3 million in deals
-
Memories and Faith" features war memorabilia
-
Smart solutions - Key for Hanoi tourism in 2025
-
HABECO – The spirit of Vietnam rising
-
Bia Ha Noi brings you golden luck in Lunar New Year
-
Quintessence of Tonkin: Modern approach to experiencing Vietnamese culture