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Banking & Finance

FTSE Russell puts Vietnam on Watch List prior for possible stock market reclassification

Released at: 16:21, 27/09/2018

FTSE Russell puts Vietnam on Watch List prior for possible stock market reclassification

Photo: Duc Thanh

Country added to Watch List to commence engagement process prior to possible future reclassification.

by Phi Linh

According to the FTSE Annual Country Classification Review released on September 26, Vietnam is currently classified as a Frontier market and is being added to the Watch List for possible reclassification as Secondary Emerging.

In June, Vietnam was not added to the MSCI Emerging Markets Indexes representing large-mid-small-cap across Emerging Market (EM) countries. In a recent report, BSC Securities forecast it will be included in the monitoring list and needs one or two years of improvements to be officially upgraded in March or September each year.

“The market reclassification will notably impact the stock market, for example, and the management agency’s continual reform and upgrade of the market, and will have a positive impact on investors as well as a short-term impact on purchasing stock indexes according to the structure list of Exchange Traded Funds,” BSC’s report stated.

According to a recent report from BaoViet Securities (BVSC), if Vietnam is listed on ranking lists in the next reclassification and improvements are needed to meet the final criteria, Vietnam will probably be officially upgraded to Secondary Emerging Market in September 2019.

"According to our observation, after being added to the Watch List for possible reclassification as Secondary Emerging in September 2015, Saudi Arabia’s stock market saw a positive impact. Therefore, we believe that Vietnam being listed in the next classification will have a positive impact on the Vietnamese stock market,” according to the BVSC report.

In the March 2018 Interim Review, FTSE Russell announced that Saudi Arabia would be designated as a Secondary Emerging Market within the FTSE Country Classification scheme commencing with the FTSE GEIS Index Series semi-annual review in March 2019.

A formal review of country classification within the FTSE global equity indexes is conducted on an annual basis each September using a comprehensive, transparent and consistent methodology. This annual review incorporates ongoing country classification research and classifies stock markets as Developed, Advanced Emerging, Secondary Emerging, or Frontier within the FTSE global equity indexes.

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