Vietnam continues to be on FTSE’s watch list for upgrading emerging markets

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According to the announcement from FTSE Russell, Vietnam continues to be on the watch list for Secondary Emerging Markets. FTSE Russell also said that Vietnam would be considered for a second-class emerging market in September 2021.

Vietnam continues to fail to meet the “Settlement Cycle DvP (DvP)” criterion – judged as “limited” – because investors must deposit enough cash before placing a transaction. Due to this regulation, the possibility of a transaction failure is almost non-existent, so FTSE Russell does not evaluate the criterion “Payment – The rate of transaction is rarely failed”.


Levels meeting the Vietnamese criteria in the FTSE upgrade watch list (Green: Criteria to be upgraded)

Report of SSI Securities Analysis Center (SSI Research) stated that the new Law on Securities will allow the central counterpart clearing system (CCP – expected to partially settle the deposit of enough cash before place orders), short sell, intraday trading and other popular products. However, all of this is only in draft form and will come into effect next year (1/1/2021), so FTSE Russell has not yet acknowledged these unofficial changes.

According to a report by VNDirect Securities, Vietnam is also working to resolve the bottleneck of “Securities Clearing” by cooperating with Korean partners to implement a new securities trading system which is expected to be reimbursed in 2021. Vietnam also plans to set up a clearing house under the Central counter Party model (CCP). With the application of this new clearing and settlement model, Vietnam hopes to solve the problem of “checking to have enough money before transactions” as at present, thereby removing the “button the important “tie” in the process of upgrading to emerging markets of FTSE and MSCI.

Source: – Translated by