Official approval of the Project to upgrade the stock market

(GLO)- On September 14, Deputy Prime Minister Ho Duc Phoc signed Decision 2014/QD-TTg approving the Project to upgrade Vietnam's stock market with the goal of developing the market into an important medium- and long-term capital mobilization channel, while promoting regional and international integration.

The project aims to fully meet the criteria for upgrading from a frontier market to a secondary emerging market under FTSE Russell, while maintaining this new rating, while aiming to meet MSCI's emerging market upgrade criteria and become a senior emerging market under FTSE Russell.

The Government has approved the Project to upgrade the Vietnamese stock market with many groups of tasks. Photo: QUANG DINH/TTO

Upgrade to secondary emerging market

Removing pre-transaction margin barriers for foreign investors, especially when the Central Clearing Counterparty (CCP) mechanism has not been implemented, by solving the problem of pre-payment for securities purchases.

Transparency of foreign ownership information, creating equal access to information for foreign investors; Stabilizing the foreign exchange market to respond to fluctuations in foreign investment flows.

Strengthening management and supervision capacity: Upgrading human resources and information technology systems of the State Securities Commission.

Intra-sectoral and inter-sectoral coordination between the Ministry of Finance, the State Bank and the Ministry of Public Security in risk monitoring and prevention, ensuring system security and safety.

Meet the criteria for a higher upgrade

Review and loosen foreign ownership room, remove restrictions in unnecessary sectors; develop advanced payment and clearing infrastructure, support a 100% margin-free payment mechanism and implement CCP. Study the application of a mechanism for borrowing, lending securities and controlled short selling through the mechanism of selling pending securities and intraday trading.

Develop the foreign exchange market, deploy risk prevention tools for indirect investment; strengthen management coordination between foreign exchange management agencies and the stock market in monitoring foreign capital flows.

Ms. Tran Ngoc Thuy Vy, analyst at Mirae Asset Securities Vietnam, assessed that the upgrade will raise the standards of Vietnam's stock market in terms of transparency, operation and ability to attract medium and long-term capital, creating opportunities to participate in global index baskets and attract large capital flows from ETF funds and international investors.

Economist , Dr. Dinh The Hien emphasized that the project demonstrates the Government's determination to perfect the institution, making the stock market an important part of the Vietnam International Financial Center, while improving the quality of products on the floor, from stocks to bonds, to attract and retain long-term investors.

Mr. Vo Van Huy, Head of Senior Client Department at DNSE Securities Company, forecasts that if Vietnam's stock market is upgraded in the upcoming review period of FTSE Russell (expected on October 7), about 1.5 billion USD from passive funds following the FTSE index will flow into the market, and total foreign capital flow could reach 10.4 billion USD, bringing positive effects to both domestic and foreign capital flows.

The project to upgrade Vietnam's stock market is expected to increase transparency, standardize operations, improve business quality, and at the same time create a favorable environment to attract stable foreign capital flows and develop a sustainable market, towards international standards.

Source: https://baogialai.com.vn/chinh-thuc-phe-duyet-de-an-nang-hang-thi-truong-chung-khoan-post566651.html