VN fails to make MSCI watchlist for status upgrade

June 26, 2019 - 16:45
Việt Nam has once again missed the chance to break into Morgan Stanley Capital International’s watchlist of potential reclassification for a status upgrade.


Việt Nam has once again failed to enter the Morgan Stanley Capital International (MSCI) watchlist for a market status upgrade following the latest statement on June 26.  Photo

HÀ NỘI — Việt Nam has once again missed the chance to break into Morgan Stanley Capital International’s watchlist of potential reclassification for a status upgrade.

The US-based global provider of equity, fixed income, hedge fund stock indices and multi-asset portfolio analysis tools on Wednesday reclassified the MSCI Kuwait Index to emerging-markets status from frontier-markets status.

The decision was “subject to omnibus account structures and same National Investor Number (NIN) cross trades being made available for international institutional investors before the end of November 2019,” MSCI said in its statement.

“Kuwait’s Market Development Project has set the path for the seamless implementation of numerous regulatory and operational enhancements in the Kuwaiti equity market," said Sebastien Lieblich, Global Head of Equity Solutions and Chairman of the MSCI Equity Index Committee.

“These enhancements have significantly increased the accessibility level of the Kuwaiti equity market for international institutional investors and resulted in broad positive feedback from these investors on our reclassification proposal.”

MSCI also decided to consult global investors on the potential reclassification of the MSCI Iceland Index to the frontier-markets status.

The MSCI Vietnam Index was not mentioned in the MSCI’s statement. The Vietnamese equity market has for years tried to make the MSCI watchlist for an upgrade to emerging markets status from frontier markets status.

The latest announcement by the MSCI was in line with previous predictions made by analysts and securities firms in Việt Nam.

There was little chance for Việt Nam to get onto MSCI’s watchlist this year, Trần Anh Dũng, director of VNDirect Securities Corporation’s Market Strategy Department, told Việt Nam News on May 31.

Kuwait had made some remarkable changes between June 2017 and February 2019.

According to Viet Dragon Securities Co (VDSC), the Kuwaiti government had erased the foreign ownership limit for the banking sector, which had stood at 49 per cent. The rate in Việt Nam is 30 per cent.

Companies listed in Kuwait’s equity market are able to compile their documents in English. Meanwhile, very few Vietnamese firms are able to do so.

But the latest decision was not so bad for Việt Nam, according to VDSC, as the occupancy of Vietnamese shares in the MSCI Frontier Markets Index and MSCI Frontier 100 Index would increase to 25.8 per cent and 30 per cent, respectively.

The passive fund Ishares MSCI Frontier 100 ETF could buy in US$65 million worth of Vietnamese shares. Meanwhile, active funds had larger potential as they were eyeing $3 billion worth of shares in the MSCI Frontier Market Index.

According to SSI Securities Inc (SSI), if the amended Law of Securities was passed by the National Assembly and took effect in 2021, Việt Nam could be included on MSCI’s watchlist immediately. — VNS