The upgrade, which Vietnam has pursued for nearly a decade, is expected to raise the market’s profile among foreign investors and create greater opportunities for Vietnamese companies to raise capital.
Of the estimated 3.4 billion USD in inflows, about 1.5 billion USD is expected to come from passive investment funds after Vietnam is included in FTSE Russell’s benchmark indexes.
Thai Van Chuyen, Chief Executive Officer of Thanh Thanh Cong – Bien Hoa Joint Stock Company, said: “Investment funds are looking beyond financial indicators and are increasingly focused on sustainable development, which is a core element for businesses. They want to see companies effectively implement ESG standards, covering environmental, social and governance factors as well as operational standards. Companies that have adopted and complied well with these standards are likely to attract greater investment interest.”
The upgrade to Emerging Market status could broaden interest from international funds and investors in Vietnam’s stock market. However, alongside the potential to attract more capital, the upgrade also puts greater pressure on the market to further improve its operating framework, enhance the quality of information disclosure and strengthen investor protection.
