Speaking at the conference, Mr. Zafer Mustafaeglu, Head of Operations Division in Finance, Competitiveness and Innovation, East Asia-Pacific, World Bank, said that Vietnam is catching up with other countries in the region in terms of market size. This is clear evidence of the Government’s continued efforts to improve a favorable market environment, including through policy directions, regulations and numerous forums to raise awareness and awareness. consensus on market development.
Vietnam aspires to become a upper middle-income country by 2035 and a high-income country by 2045, so the quality and depth of the country’s financial sector can be expected to be at least as good. must be on par with comparator countries.
According to a representative of the World Bank, the market size of Vietnam has become too large to stay in the Marginal market group. Vietnam’s equity market has weighted over 30% in the MSCI Global Marginal Market Index. This is the maximum weight; followed by Morocco at 10%.
“Vietnam is like a middleweight boxer but is still competing in the lightweight group,” said Zafer Mustafaeglu, emphasizing that the Vietnamese government has made efforts to upgrade it to an Emerging Market. That not only brings about quality improvement, but also attracts the attention of high-ranking international investors to Vietnam.
For example, in the stock market, upgrading to an Emerging Market could bring in an additional $10 billion in new indirect investment for Vietnam, of which an additional $2-5 billion could be received in the first year alone. According to the representative of the World Bank, to achieve such promising results, Vietnam needs to have a solid foundation for the market to operate effectively.
Accordingly, the WB representative introduced the concept of “six eyes” (6 letters I in English). These are the 6 elements of the market platform that need to be paid close attention.
The first is Institutions. Monday is Infrastructure. The next three elements are Issuers, Investors and Intermediaries. The last element is Tools.
Given the current turmoil in the market, the WB noted that the Vietnamese market is still relatively young. So mistakes are possible but more important is how we learn from mistakes, not to close the door just because we have some bad members, there should be no overreaction. constrain long-term growth.
In that context, Vietnam should commit to accelerating its upgrade to Emerging Market. This means that Vietnam also needs to be more open to international indirect investors, and at the same time improve the quality of the market. Information must be timely, reliable and more accessible.
Vietnam may consider measures to increase the supply of securities for foreign investors. A deeper, more diversified market will reduce the chances of manipulation and profiteering.
Finally, capital markets are the core of an aggregate system. Markets interact with other parts of the system. For example, commercial banks are important players in the capital market in all respects. Many banks are issuing securities, so they are the issuers, many are investors (they buy government or corporate bonds) and many are intermediaries (private issuers). , custody and distribution services of corporate bonds). Therefore, policies in the banking industry also affect capital markets and vice versa. Similarly, policy in the capital markets cannot sometimes be effective without being harmonized with policy in the banking sector…
On that basis, the World Bank welcomes forums like this important event. Today’s forum aims to find solutions to the problems we face both in the short and medium term, and the World Bank also recommends that the Government organize such a forum periodically, for example every two years or annual.
The World Bank Group is strongly committed to supporting the development of Vietnam’s capital market, going hand in hand with Vietnam to achieve its goals; willing to bring expertise globally and tailor it specifically to Vietnam.
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