Upgrading requires the joint effort of many market participants
Ms. Vu Thi Chan Phuong
Chairman of the State Securities Commission |
Ms. Vu Thi Chan Phuong evaluates the upgrade of the stock market as a common policy and has received attention and guidance from the Government and the Prime Minister in recent times. Most recently, in Directive No. 06/CT-TTg dated February 15, 2024, the Prime Minister also requested the Ministry of Finance to lead and coordinate with the State Bank of Vietnam, the Ministry of Planning and Investment to urgently resolve the obstacles in the responsible areas to meet the criteria for upgrading the stock market from the frontier to the emerging market.
In recent times, the management agencies have made great efforts to implement many solutions to complete important criteria set by international rating organizations.
Accordingly, the State Securities Commission (SSC) has organized many meetings with ministries and sectors; at the same time, it has organized meetings and working sessions both inside and outside the country with international rating organizations, major international financial institutions, and market members to jointly study and propose solutions to resolve the remaining obstacles in the upgrading process of Vietnam’s stock market.
According to evaluations from rating organizations and major international financial institutions, Vietnam has made many improvements and achieved many important criteria. However, there are currently two crucial issues that need to be focused on for improvement and have measures to resolve in order to create conditions for foreign investors to participate in the stock market in the future, namely: pre-funding requirement and foreign ownership limit. These issues require the practical coordination of relevant ministries and sectors to resolve.
In parallel with completing the main criteria of international rating organizations, the State Securities Commission continues to improve domestic regulations based on the research of international regulations and practices to promote the sustainable development of Vietnam’s stock market and create a favorable environment to attract international investors and indirect foreign investment.
According to Ms. Phuong, the upgrade of the stock market depends on the objective evaluation of international rating organizations through the practical experience of foreign investors. Therefore, the cooperation of market members in providing services, listed companies, especially large listed organizations, in transparent information disclosure, English information disclosure, good corporate governance, etc., is very important.
2024 is predicted to be brighter than the previous year
The Chairman of the State Securities Commission also shared an overview of Vietnam’s stock market in 2024.
According to Ms. Phuong, the market always depends on subjective and objective factors. The performance of the stock market reflects the overall integration of macro factors at home and abroad, the health of businesses… through the perspective, trust, and expectations of investors in the market.
Therefore, the performance of the stock market in the coming period continues to largely depend on macroeconomic policies and domestic and international economic prospects. According to the International Monetary Fund (IMF), tight monetary policies have gradually rebalanced aggregate demand to potential output levels, supply chain disruptions and commodity prices have decreased. Global inflation is forecasted to gradually decrease and return to the target level of central banks by 2024.
Despite that, the Vietnamese economy in general and the stock market in particular are forecasted to continue to face many difficulties, challenges in the context of climate change, increasing geopolitical tensions in some countries, regions, global economy, the international financial market is forecasted to continue to have complex and unpredictable fluctuations. Although global inflation has been controlled, underlying inflation is forecasted to remain high, and businesses will continue to face many difficulties with limited absorption capacity.
However, looking at the overall picture, Vietnam’s domestic stock market in 2024 is forecasted to have a brighter outlook than in 2023 thanks to the support of many positive factors. Accordingly, many solutions aimed at removing difficulties, stabilizing, and promoting economic growth have been issued and directed, such as: Reducing interest rates for loans; stabilizing the foreign exchange market; promoting disbursement of public investment capital; implementing credit support packages for sectors and fields, removing difficulties and obstacles in the real estate market, corporate bond market, exempting, reducing, rescheduling taxes and fees to support businesses…
Therefore, a more positive trend will continue to be maintained in many industries and sectors, thereby creating better conditions for the recovery of businesses. The prospects of the Vietnamese economy are still highly valued by international organizations, maintaining a rapid recovery rate, belonging to the group of countries with the highest growth rate in the region and the world.
“The VN-Index has officially exceeded 1,200 points in the Spring session of Giap Thin (February 15). The positive start in the early stage of the year creates expectations for Vietnam’s stock market to have a more outstanding year in 2024 when fundamental factors such as macroeconomics and the health of businesses are forecasted to further improve,” commented the leaders of the State Securities Commission.
