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7 Aprile 2021

Vietnam

FOREIGN INVESTMENTS MIGHT FLOW INTO VIỆT NAM'S STOCK MARKET from the second half of 2021: BVS

Update: April, 07/2021 - 10:04HÀ NỘI — Bảo Việt Securities Company (BVS) expects Việt Nam's stockmarket might attract up to US$1.4 billion from index tracking funds, if ViệtNam is officially upgraded to a secondary emerging market by FTSE.In an assessment and classification result released at the end of March,FTSE acknowledged efforts of the State Securities Commission of Việt Namin improving the legal corridor, and as the revised version of the Law onSecurities went into effect in January, it is expected to pave the way forimproving the market's quality.However, in practice, Việt Nam's stock market continues to fail to meet thecriteria for clearing operations under the Delivery vs Payment (DvP)model due to the requirement of depositing enough money in Clause 2, Article7 of Circular 203/2015/TT-BTC, according to FTSE.Therefore it continued not to meet the two criteria, including "Settlement Cycle(DvP)" - rated at Restricted, and the criterion "Settlement - rare incidence offailed trades" - was not rated.As the market met seven out of nine conditions for being upgraded to thesecondary emerging market offered by FTSE, the Vietnamese stock marketcontinues to be on the watch list for upgrading to secondary emerging marketof FTSE for the evaluation in September.Despite that, BVS still maintains a positive stance on the prospect that ViệtNam will be upgraded to a secondary emerging market by FTSE in its2022 upgrade assessment. In case of officially being upgraded to a secondary emerging market, BVSestimated that Việt Nam's stock market will attract up to US$1.4 billion fromfunds tracking or benchmarking indices like the FTSE Global All-Cap, FTSEAll-World and FTSE Emerging Markets.Based on historical data of actual movements of global markets, at least threemonths, from September to December, before a stock market is officiallyupgraded to emerging market by FTSE, that market usually receives strongcash flows from foreign investors and enters an upwards trend, BVS said. With the expectation that the Vietnamese stock market can be upgraded intwo assessments of FTSE in 2022, BVSC expects that foreign cash flows mayflood into the country's stock market from the second half of 2021.Under FTSE's set of criteria, large-cap stocks are the most likely tobenefit from the trend. BVSC believes that with a positive macroeconomic outlook, being upgraded tosecondary emerging market is a positive signal for the improvement of themarket quality and will help the country's stock market attract investmentflows. — VNS (ICE HO CHI MINH CITY)


Fonte notizia: Vietnam News