DNVN - Sharing at the workshop "Creating motivation to upgrade the stock market", on the afternoon of July 2, Ms. Tran Thi Khanh Hien - Director of Research, MB Securities Company said that, besides opportunities, listed enterprises also face many challenges when upgrading the market.
According to Lao Dong Newspaper Editor-in-Chief Nguyen Ngoc Hien, the Vietnamese stock market is accounting for the highest proportion in frontier stock market indexes (up to 29% in MSCI's frontier market index and 38% in FTSE Russell's index).
Upgrading the stock market is a goal that needs to be achieved. At the same time, it is necessary to create motivation for listed companies and investors to join hands to contribute and build an attractive market in the eyes of foreign investors.
Mr. Vu Chi Dung - Director of the Department of International Cooperation, State Securities Commission, affirmed that the Government 's continuous efforts in innovating and perfecting the policy and management framework have helped the Vietnamese stock market gain strong attraction after more than two decades of operation.
To date, the Vietnamese stock market has become one of the fastest growing markets in terms of size and liquidity in the region. However, Vietnam is still classified as a frontier market, while most exchange-traded funds (ETFs) pursue stocks in emerging markets.
“Therefore, Vietnam needs to act quickly to be reclassified as an emerging market if it wants to attract more investment capital from international investment organizations. The Vietnamese stock market is currently listed by FTSE Russell as a waiting group for upgrading to Group 2 - emerging market,” said Mr. Dung.
From Korea's experience in upgrading the stock market, Mr. Dinh Minh Tri - Head of the individual client analysis department, Mirae Asset Securities Company (Vietnam) has made some recommendations. Accordingly, the first factor is to improve transparency and information disclosure.
Specifically, ensuring information disclosure in English for large listed companies to attract international investors as well as transparency in financial and corporate governance processes. Market access for foreign investors should be enhanced, such as simplifying registration procedures and opening accounts for investors.
In particular, it is necessary to extend trading hours and improve the payment and clearing system. To do this, it is necessary to develop an information technology system towards modern transactions to ensure safety and efficiency as well as risk management.
It is necessary to develop diversified financial products, such as enhancing financial products. At the same time, improve access to the foreign exchange market through expanding and flexibly diversifying the market to suit the needs of international investors.
“Based on Korea’s experience, Vietnam can adopt comprehensive measures to improve its stock trading system. Most major securities companies in Korea have deployed artificial intelligence (AI) systems and chatbots to improve customer service and support automated trading.
AI helps analyze data and make market predictions. While chatbots support customers with common problems and provide information quickly,” Mr. Tri shared.
Ms. Tran Thi Khanh Hien - Director of Research, MB Securities Company said that, besides opportunities, listed enterprises also face many challenges when upgrading the market.
That is because the capitalization scale of listed Vietnamese enterprises is still quite small, so the number of stocks that meet the MSCI EM Index criteria is not much. According to MSCI's frontier market classification basket, although Vietnam's proportion is the largest at 26%, in the top 10 stocks with the largest proportion in this basket, there are only 2 Vietnamese stocks.
In addition, the greater the openness of the market, the greater the impact of fluctuations in external factors on the Vietnamese stock market in general and listed stocks in particular. Competition with investment opportunities in other markets also increases.
“Upgrading the market requires the cooperation of many parties, not only from ministries and sectors, but also from market participants. Enterprises need to professionalize investor relations (IR) activities; ensure consistency in the frequency and content of information provided as well as diversify access channels for investors.
In fact, some assessments by international rating organizations still believe that foreign investors' access to information in the Vietnamese market is limited and needs to be improved," Ms. Hien recommended.
Ha Anh
Source: https://doanhnghiepvn.vn/kinh-te/chung-khoan/nang-hang-thi-truong-chung-khoan-doanh-nghiep-niem-yet-gap-nhieu-thach-thuc/20240702115050441
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