A status upgrade may help the Vietnamese security market attract some 4.5 billion USD in investment, according to experts from the Military Bank Securities (MBS).

 

In the MBS’s most optimistic scenario, the Morgan Stanley Capital International (MSCI), a global leading provider of research-based indexes and analytics, would put Vietnam on the watching list for potential reclassification to the emerging market status in June 2020 and officially get the upgrade one year later at the earliest. 

 

Large caps like VNM, VIC, VHM and HPG are expected to be added to the MSCI Emerging Market Index.

 

Regarding momentum for the Vietnamese stock market in 2019, MBS experts said that it comes from forecast of strong economic growth, robust profit expansion of local firms, and positive capital flow into the Vietnamese market.

 

However, the market will face potential risks of US Federal Reserve’s interest rate hike and the US-China trade war.

 

In June, 2018, the MSCI decided to hold Vietnam’s status in the equity market in the Frontier Markets Index until 2019.

 

According to MSCI, the promotion of the Vietnamese equity market would depend largely on the improvement of eight items: foreign ownership limits, foreign room levels, equal rights for foreign investors, foreign exchange market liberalisation levels, information and market regulation English disclosure, clearing and settlement, and transferability.

 

Meanwhile, Vietnam was one of three countries added onto FTSE Russell’s watch list for a possible future upwards reclassification last year.

 

In its annual country classification review published in September 2018, the UK-based data service provider said Vietnam “is currently classified as a Frontier market and is being added to the watch list for possible reclassification as Secondary Emerging.”-VNA