Vietnam's stock market upgraded: New investment opportunities for global investors

(NLDO) - Speaking in foreign press, many experts positively commented on the announcement by the FTSE Russell Rating Organization that Vietnam's securities market was upgraded.

The FTSE's move sends a strong signal to global investors that the exporting nation can weather the coming trade challenges, said Suvir Loomba, head of Asia equities services at HSBC.

Wanming Du, head of index policy for Asia- Pacific at FTSE Russell, said the upgrade is expected to be a positive structural factor for Vietnam’s capital markets, reinforcing the country’s progress towards greater openness, improved liquidity and deeper institutional participation, according to the Financial Times.

Mr. Marco Martinelli, senior official at Turicum Investment Management (Switzerland), commented: "The upgrade will signal that Vietnam has successfully resolved long-standing market access issues and is now recognized by global institutional investors as a worthy market to invest in."

According to Bloomberg, HSBC analysts led by Mr. Herald van der Linde said that Vietnam's outperformance this year is remarkable, especially when compared with other markets at the time of the FTSE's upgrade to emerging market status. This shows that the potential for further growth after the FTSE's upgrade may not be much. Before this decision, investors are wondering whether this will be a driving force for higher stock prices and whether the expectation of massive foreign capital inflows will actually happen in Vietnam's $341 billion stock market.

However, the upgrade brings many long-term benefits, helping to expand access to Vietnam for a wider group of investors with more diverse investment rights. Investors also believe that allowing more foreign investment participation will help increase the liquidity of the economy .

David Sol, global head of policy at FTSE Russell, said Vietnam's reclassification reflects the implementation of important improvements in market infrastructure.

According to Bloomberg, Vietnam has been on the watch list for upgrading by FTSE Russell since September 2018 and in recent years, the authorities have carried out many extensive reforms to approach international standards. According to the plan, FTSE will re-evaluate Vietnam in March next year.

FTSE Russell estimates that the upgrade could add about $6 billion in foreign capital to Vietnam, while HSBC forecasts the figure at $3.4 billion, especially considering that 38% of Asian equity funds and 30% of global emerging market equity funds already hold Vietnamese stocks. HSBC believes that the actual flows could be smaller and more dispersed as some of the money was already positioned before the official upgrade.

Source: https://nld.com.vn/bao-chi-nuoc-ngoai-noi-gi-ve-su-kien-chung-khoan-viet-nam-duoc-nang-hang-1962510082055154.htm