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Vietnam missed out an opportunity to be put on the waiting list in June, but it is one of the best performers in Asia this year.
Vietnam May Join Emerging Markets in 2020 at the Earliest: MSCI
The headquarters of the Hochiminh Stock Exchange. Photo: Bloomberg
Global index provider MSCI might consider putting Vietnam on the waiting list to be upgraded to the emerging market status in June 2019 in the most optimistic scenario and officially get the upgrade one year later, said Valentin Laiseca, head of ASEAN Index Coverage, MSCI.
Theoretically, Vietnam is eligible for an upgrade, but it has not guaranteed sustainability in case of getting upgraded, Laiseca said at the annual conference titled “Gateway to Vietnam” in Ho Chi Minh City on Oct. 25.
Laiseca added that the Vietnamese stock market meets liquidity requirements corresponding to emerging markets. The 14 largest Vietnamese companies by market capitalization meet criteria on company size and security liquidity, but only four of them meet the requirement on float market cap.
In addition, Vietnam needs to further loosen the foreign ownership limits and equality among investors, especially the free float ratio for foreign newcomers, he said.
Overseas investors also have difficulty with capital inflows and outflows, banks that provide clearing services, and securities borrowing and lending, Laiseca said.
Vietnam missed out an opportunity to be put on the waiting list in June this year when Pakistan was upgraded to emerging markets. However, it is one of the best performers in Asia this year, with the VN Index rising 25% at the close on Oct. 25.
Foreign traders net purchased $1.45 billion worth of Vietnamese securities in the nine months through September, up nearly 80% from a year earlier, giving a strong impetus for the local market.
Their securities portfolios expanded 33.8% from end-2016 to $27.3 billion at the end of September, the highest value recorded so far, according to a report by the National Financial Supervisory Commission.

TUAN MINH