“The long journey of upgrading Vietnam's stock market may soon be completed”

CNBC recently mentioned the potential of Vietnam’s $200 billion stock market from the story of upgrading. Especially when Vietnam can attract global semiconductor companies and benefit from the trend of diversifying supply chains.

CNBC: “Vietnam's long journey to upgrade its stock market may soon be complete”

CNBC recently mentioned the potential of Vietnam’s $200 billion stock market from the story of upgrading. Especially when Vietnam can attract global semiconductor companies and benefit from the trend of diversifying supply chains.

Referring to the 2024 stock market classification report of FTSE Russell - one of the three major organizations in market rating published this October, CNBC - the largest financial news channel in the US said that Vietnam has been classified as a frontier market and added to the watch list since September 2018 to be classified as a secondary emerging market. FTSE Russell continues to keep Vietnam on the watch list in this review. FTSE Russell also acknowledged the Vietnamese government's continued support for changes in the stock market and still appreciates the constructive relationship with the State Securities Commission, other market agencies and the World Bank.

Upgrading Vietnam's stock market to emerging market status could see billions of dollars of capital flow into the country's financial market, which currently has a market capitalization of just over $200 billion.

Speaking on CNBC’s “Street Signs Asia,” Quan Trong Thanh, Director of Analysis at Maybank Investment Bank (MSVN), said that FTSE could upgrade Vietnam to emerging market status as early as September 2025. “We see good progress in Vietnam in removing regulatory bottlenecks to move towards the goal of upgrading the stock market to emerging market status,” Thanh told CNBC.

This is also the target set by the Prime Minister at the beginning of the year. FTSE Russell has recommended that Vietnam needs to maintain its pace if it wants to reach the target of upgrading its stock market by 2025.

The Government is refocusing on the economy, with GDP growth forecast to reach at least 6.2% next year, MSVN experts said. The World Bank (WB) also forecasts Vietnam's GDP to grow by 6.5% by 2025 thanks to increased global demand and a recovery in domestic consumer confidence.

According to the Vietnam Institute for Economic and Policy Research (VEPR), GDP growth in the fourth quarter of 2024 is expected to reach 7.4%, thereby helping the whole year's GDP reach the 7% target set by the Government.

CNBC also pointed out that Vietnam has benefited from the trade war between the US and China as companies move to diversify their supply chains. At the same time, its chip manufacturing capabilities have helped Vietnam compete with Malaysia and attract global semiconductor companies.

According to CNBC, Mr. Quan Trong Thanh is not the only one who has given an optimistic assessment of Vietnam's medium and long-term prospects. Ms. Christine Phillpotts, Senior Vice President of Emerging Markets at Ariel Investments - an investment firm specializing in small and mid-cap stocks based in Chicago, assessed that countries like Vietnam are in a relatively good position because they are less dependent on foreign capital or have lower foreign debt. Therefore, Vietnam becomes a relatively safe investment destination.

Vietnam is also betting on AI development, taking advantage of its ability to assemble, test and package chips to meet global chip demand. Vietnam has attracted a $1 billion investment from a Korean manufacturer through 2025. With its strength in chip assembly, testing and packaging to meet global chip demand, the country has attracted a $1 billion investment from Korean manufacturing operations through 2025. By 2030, Vietnam aims to become a center for innovation, developing AI solutions and applications in the ASEAN region and the world. Vietnam's chip manufacturing capabilities are competing with Malaysia, attracting global semiconductor companies, with major manufacturing centers such as Samsung and Foxconn already present.

Vietnam has benefited from the trade war between the US and China as companies seek to protect their supply chains by implementing a “China + 1” strategy by diversifying their supply chains and reducing their dependence on China. In fact, Vietnam is poised to continue strengthening its position in the global supply chain.

“Vietnam has a geographical advantage as it is close to China and has wide access to export markets in developed countries and participates in many free trade agreements,” CNBC quoted Helmi Arman, an economist from Citi.

However, according to experts, the shortage of skilled labor and infrastructure, especially in terms of stable electricity supply, could be obstacles to attracting more foreign investment.

Source: https://baodautu.vn/cnbc-hanh-trinh-dai-nang-hang-cua-chung-khoan-viet-nam-co-the-sap-som-hoan-tat-d228644.html