DNVN - Vietnam is getting closer to being upgraded from a frontier market to a secondary emerging market, according to FTSE. This is an important milestone for the Vietnamese stock market, opening up great opportunities for large-cap stocks such as VCB, VHM, HPG, VIC, VNM, MSN.
Vietnam may be considered for upgrade in March 2025
The analysis and investment consulting department of Bao Viet Securities Joint Stock Company (BVSC) has just released an updated report on the market upgrade process in September 2024.
According to BVSC, Vietnam has now completed 7/9 criteria needed to be upgraded to secondary emerging market status. However, there are still two criteria that Vietnam has not met according to FTSE's requirements.
Regarding the Payment Cycle (DvP) criterion, this criterion is currently assessed as “limited” because the process requires checking the availability of funds before making a transaction, which prolongs the payment time. Meanwhile, the payment criterion – the cost of unsuccessful transactions has not been assessed because the Vietnamese market has almost no failed transactions.
Vietnam could be officially considered for upgrade in March 2025.
The Ministry of Finance’s issuance of Circular 68/2024/TT-BTC, effective from November 2, 2024, has made significant progress in helping Vietnam meet the remaining two criteria. Foreign institutional investors will no longer need to have sufficient funds in advance to purchase securities, which makes the transaction process more flexible.
BVSC predicts that in the review on October 8, FTSE will record positive results on the market upgrade process. If the improvement continues, Vietnam may be officially considered for upgrade in March 2025, after the final assessment of the failure transaction cost criteria is completed.
Opportunity for large-cap stocks
Upgrading to secondary emerging market status is not only an international recognition, but also brings great opportunities for the Vietnamese stock market, especially large-cap stocks. According to BVSC, participation in indices such as FTSE Emerging Markets, FTSE All-World Index and FTSE Global All-Cap will promote international investment flows into leading stocks.
Large-cap stocks expected to be bought heavily when Vietnam is upgraded include VCB, VHM, HPG, VIC, VNM, MSN with an estimated additional purchase value of between USD 97 million and USD 159 million for each stock. This means that these stocks will be of interest and investment to large ETF funds around the world.
Not only large-cap stocks, small-cap stocks such as KDH, DGC, STB, FRT, VRE, VJC, SHB, SSI, VND, VCI, VIX are also expected to attract investors' attention when Vietnam upgrades.
BVSC expects that the Vietnamese stock market will continue to maintain its positive growth momentum and the upgrade to secondary emerging market status will take place in early 2025. This is an optimistic signal for domestic and foreign investors, opening the door to larger international capital flows, thereby promoting the sustainable development of the market.
Thu An
Source: https://doanhnghiepvn.vn/kinh-te/chung-khoan/nang-hang-thi-truong-chung-khoan-co-phieu-nao-se-don-song-lon/20240920020258718
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