What does the World Bank say about Vietnam's stock market upgrade process?

Ms. Vu Thi Chan Phuong - Chairwoman of the Securities Commission - at a meeting with WB representatives in Vietnam - Photo: SSC

Ms. Vu Thi Chan Phuong - Chairwoman of the Securities Commission - recently had a working session with Ms. Mariam Sherman, new country director of the World Bank.

At the meeting, Ms. Phuong said that in recent times, the World Bank has supported Vietnam in policy advice, sharing international experiences as well as in developing thematic assessment reports.

At the same time, the World Bank supports stock market monitoring in the Joint Capital Market Development Program (J-Cap) which has been implemented since 2018.

According to Ms. Phuong, the Ministry of Finance and the Vietnam Securities Commission are implementing solutions to meet the criteria of international credit rating organizations, to upgrade the Vietnamese stock market from a frontier market to an emerging market.

Accordingly, many proposed solutions have received consensus from international organizations, market members, and scientists, and are considered highly feasible and practical.

Ms. Mariam Sherman said that the organization will consider continuing to implement J-Cap for the Vietnamese stock market in the near future.

She also appreciated the solutions that the Ministry of Finance and the Vietnam Securities Commission are implementing to achieve the goal of upgrading the stock market.

At the same time, Ms. Mariam Sherman affirmed that in the coming time, the World Bank will continue to accompany Vietnam in implementing solutions to achieve the goal of upgrading the stock market.

At the end of April, the Securities Commission also had an online meeting with the World Bank and the Asian Securities and Financial Markets Association (ASIFMA) on the contents of the draft circular amending and supplementing a number of provisions on securities transactions on the securities trading system; clearing and settlement of securities transactions; activities of securities companies and information disclosure on the stock market to remove some obstacles related to the criteria for upgrading the Vietnamese stock market.

One of the issues that international organizations are particularly interested in during the process of upgrading Vietnam's market is the issue of pre-transaction deposits, payment processing procedures of VSDC, securities companies, and depository members for transactions of foreign investors, and the ability to pay for transactions.

Upgrading the stock market, waiting for tens of billions of USD of foreign capital to flow into Vietnam

Mr. Ketut Ariadi Kusuma - Head of Finance, Competitiveness and Innovation Group of World Bank in Vietnam - assessed that Vietnam's aspiration to upgrade to emerging market status is a strategic step, in line with the larger ambition of transforming into an upper-middle-income country by 2035 and a high-income country by 2045.

Achieving this target requires an average annual real growth rate of about 5.95% per capita over the next two decades. To date, the stock market has reached a capitalization of about 247 billion USD, accounting for 57% of GDP in 2023 and reaching a record high of 93% of GDP in 2021, showing the potential for capital mobilization for the corporate sector.

The World Bank estimates that upgrading the market could bring in up to $25 billion in new investment from international investors by 2030.

Source: https://tuoitre.vn/world-bank-noi-gi-ve-tien-trinh-nang-hang-thi-truong-chung-khoan-cua-viet-nam-20240711134052603.htm