The stock trading board inside the Ho Chi Minh Stock Exchange (HoSE) (Photo: thoibaonganhang.vn) Speaking at the Financial Street Talkshow last week, Duong Ngoc Tuan, DeputyGeneral Director of the Vietnam Securities Depository (VSD), said thatsolutions for the new information technology system, T+0 day trading mechanismand other solutions to help upgrade the market will be implemented this year.In addition, new products, especially products for the domestic derivativesmarket, are allowed to develop.
Tuan also revealed the plan to submit to the Government the market developmentstrategy project for 2021-2030, which sets out roadmaps for development in allaspects, helping market activities become more active and sustainable.
The KRX trading system, provided by the Republic of Korea’s bourse operator,the Korea Exchange (KRX), can handle 3-5 million orders per day, aiming totackle system overloads which had troubled investors last year. It is expectedto be completed and run in the first half of 2022 after a pause last year dueto the COVID-19 pandemic.
Le Chi Phuc, General Director of SGI Investment Fund Management JSC (SGICapital), said that it is necessary to introduce the new KRX trading systemsoon, so all participants in the market can proactively make their own plans inproduct development, as well as attracting new customers.
“When the KRX system is officially put into operation, many internationalorganisations will re-evaluate the Vietnamese market to upgrade it to anemerging market,” Phuc said.
Similarly, in its base scenario, VNDirect Securities Corporation said that if Vietnamcompletes the implementation of the new trading system in the first half of2022, the country’s market could be included on the MSCI (Morgan StanleyCapital International)’s watch list for upgrading to an emerging market in itsannual market assessment in May 2023. Vietnam may then be notified of itsupgrade to emerging market during the MSCI annual market review in May 2024.
Meanwhile, in the optimistic scenario, VNDirect said that the FTSE (FinancialTimes Stock Exchange) may announce the inclusion of the Vietnamese stock marketin the secondary emerging market group during its annual market review inSeptember 2022.
Although it has not been officially recognised as an emerging market, thedomestic market has achieved many criteria such as liquidity surpassing that ofmany other emerging markets in 2021, ranking only second in ASEAN afterThailand. Many large funds in the world specialising in investing in emergingmarkets have also begun to show up in Vietnam, the leader of SGI Capital added.
According to Phuc, if other solutions are followed such as continuing tomaintain and further improve asset quality, the prestige of the Vietnamesemarket will increase.
On the other hand, up to now, the criteria for organisations to evaluateupdating Vietnam into the emerging market category have reduced a lot. Theremaining issues are only technical and will be solved, Tuan said.
On the foreign capital flows front, both Tuan and Phuc agreed that the cashflow into the market recorded the strongest growth in more than two decades. Ofwhich the majority was cash flow from domestic investors and lacked cash flowfrom foreign investors.
Although domestic investors in the past two years have played a leading role inthe market, experts say that foreign capital flows cannot be ignored, becausethis is an essential factor for any stock market.
“Foreign capital inflows will bring great and potential financial resources,” Tuansaid.
“The participation of major international investors will play a significantrole in leading the investment trend, bringing a lot of experience andinternational practices to make the market more active and healthy.
Meanwhile, Phuc said Vietnam needs both domestic and foreign capital flows todevelop the market, as well as develop businesses.
New technologies, the experience of foreign investors and internationalstandards they bring into the market will help the country connect with theworld in a more comprehensive way./.
VNA
