VCN- Most important events that could have a big impact on Vietnam’s stock market willtake place in the second half of June, such as the Fed’s meeting, MSCI’s assessment, OPEC meeting and a meeting between the President of the United States and China.
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|The opportunity of Vietnam stock market to enter MSCI's followed or upgraded list in the following year is very low. Photo: N.H|
Rong Viet Securities Company has just released the investment strategy report in June. Accordingly, Rong Viet experts are particularly interested in the meeting that could take place between US President Donald Trump and Chinese President Xi Jinping. Most markets are waiting for the result of the trade war that has lasted for over a year.
The risk of not having a commercial deal and causing a comprehensive war is higher than in the November meeting between the US and Chinese presidents.
Most experts say Vietnam will get the most benefit from the trade war. But investor sentiment is still heavily influenced when the trade war escalates.
Specifically, Southeast Asian stock markets have declined since President Trump announced on Twitter that the US will raise taxes on $200 billion of Chinese goods. Thailand dropped 3.6%, Indonesia fell 3, 7%, Singapore declined by 8.2%, and Vietnam slumped 0.1%. Rong VietSecurities Companysaid that this reduction has not yet reflected a comprehensive trade war when investors are still hoping for anagreement.
Thus, experts predict that one of the following three scenarios could occur: First, the escalation of US-China trade tension may make the market plummet both in Vietnam and around the world; Second, the positive scenario is that the two sides may temporarily postpone tax increases on each other's items. Third, the most likely scenario is that the two sides will meet each other for negotiationsand President Trump will talk about a big deal as before. In this scenario, the market may increase but not much because mostinvestors are reflecting this thought.
Could Vietnam’s stock market be put into MSCI's followed list?
Investors expect that revised securities law will be the foundation for the non-voting depository certificate (NVDR), the tool that managers hope to solve the problem of overseasownership. However, even in the most positive scenario, the law passed in the upcoming parliamentary session, Mr. Phan Duc Hieu (Deputy Director of the Central Institute for Management Studies - CIEM) said it must take two years to operate NVDR.
In addition, the limitof foreign ownership is just one of Vietnam's problems. With the nine criteria that Vietnam has not achieved in the 2018 assessment of MSCI, there are 6 criteria not related to foreign ownership limits. This shows that there are still many disadvantages in Vietnam’sstock market. Therefore, even though MSCI recently tends to list a new marginalized country when the previous country is promoted, it is very difficult for Vietnam’sstock market being on the followedor upgraded list next year.
However, in the long term, experts still fully believe in the ability to upgrade when they are looking at the size of Vietnam's economy being larger than many countries in the emerging MSCI index group.
By Nguyen Hien/Quynh Lan