By Phuong Nguyen and Francesco Guarascio
HANOI (Reuters) – Vietnam is readying the launch subsequent week of a brand new shares buying and selling system that may velocity up settlement of transactions, as a part of reforms geared toward upgrading the nation’s inventory market and attracting extra overseas traders.
The transfer, if efficiently accomplished, would enhance the probabilities of the South east Asian nation being reclassified as an rising market. Both the MSCI and indices presently classify Vietnam as a frontier market, stopping many funds, household places of work and others from investing in corporations listed there.
A brand new inventory buying and selling system offered by the Korea Exchange has been examined for months and is predicted to go reside on May 2 after securities corporations full the switchover from the previous system throughout a five-day public vacation interval beginning on the closing of enterprise on April 26, in keeping with a doc despatched to brokers by Vietnam’s principal Ho Chi Minh City change and seen by Reuters.
The bourse didn’t instantly reply to a request for remark.
The new system will deal with the settlement of transactions inside a day, rushing up operations and facilitating buying and selling, particularly brief promoting, which was hampered by the present slower system.
This is a part of reforms that would result in the improve of the market. FTSE could make a constructive announcement as early as September, with an improve for Vietnam to be accomplished by subsequent 12 months, officers have stated. The improve by MSCI is predicted to take longer.
Last 12 months the World Bank estimated that upgrades might set off web inflows of between $5 billion and $25 billion to the $200 billion market by the top of the last decade. Vietnam’s benchmark inventory index has risen 4.5% to this point in 2024 however this month fell by greater than 7%.
Key reforms wanted for the upgrades are much less strict limits on overseas possession of listed corporations and the elimination of a prefunding requirement for shares transactions.
A public session on a brand new mechanism to deal with the latter hurdle will probably be accomplished within the second half of May.