Catching the wave of stock market upgrade

Economic and financial experts from Hong Kong, Korea, Taiwan and Thailand provide investors with strategic perspectives, update the latest economic and financial trends, and suggest potential investment opportunities in the stock market.

Vietnam is getting closer to the milestone of being upgraded to emerging market status – a factor that could attract a lot of international capital. According to Mr. Chu Ka Kit, Director of Investment Strategy at Yuanta Hong Kong, the Vietnamese stock market is showing a lot of potential when compared to other countries in the region, especially in terms of recent performance. However, to develop to the next level, Vietnam needs to address some core issues.

Experts at the conference held on the morning of April 19 highly appreciated the potential of the Vietnamese stock market.

PHOTO: Contributor

First of all, the current market still depends heavily on individual investors – accounting for up to 90% of the total number of investors. Meanwhile, in developed markets, the strong participation of institutional investors is a key factor in stabilizing and professionalizing. Therefore, Vietnam needs to step up attracting domestic and international institutional investors.

In addition, the listed industry structure is still concentrated in traditional sectors such as finance and real estate. To attract long-term capital flows, especially from international investors, Vietnam needs to diversify its stock portfolio, adding strategic sectors such as technology, energy, and utilities – similar to the Hong Kong market, which has a balanced structure between finance, real estate, and technology.

Vietnam is facing a major turning point in the development of its stock market, especially with the implementation of a new information technology trading system and the expectation of being upgraded from a frontier market to an emerging market. One of the main challenges is the need to diversify the stock portfolio to meet the expectations of international investors.

"Vietnam is currently in the middle of its journey of developing its stock market. While the PE/EPS growth rate ratio in developed markets such as Hong Kong, Tokyo or the US ranges from 1.1 to 1.9 - an average of about 1.5, in Vietnam it is only about 0.4. This shows that the market still has a lot of room for growth and is at an attractive valuation compared to its actual potential. Vietnam needs to continue expanding its market size by increasing the number and quality of listed stocks, improving financial transparency standards and especially focusing on ESG factors. These are key factors that can help the Vietnamese market to upgrade and join the group of emerging markets in the near future," Mr. Chu Ka Kit added.

Source: https://thanhnien.vn/don-lan-song-nang-hang-thi-truong-chung-khoan-185250419162754718.htm