Euromoney, May 25 2021
The country may soon be upgraded to the emerging market indices. But such are the market’s many anomalies, that the pioneers who first embraced its potential are still the ones that matter most today.
It has been three decades in the making, but Vietnam is on the cusp of joining the global financial mainstream. The country has only had a legally recognized private sector since the 1992 constitution and a stock market since 2000. But now it is knocking on the door of emerging market status, with all the foreign capital inflows that entails.
It is most of the way there already, impeded only by a few structural curiosities that ought to be resolved within the next couple of years. It is transformed from the days when private enterprises had no legal basis and when the stock market opened for business with just two listed companies.
Today the stock market turns over a billion dollars on some days and the biggest names in global private equity rub shoulders with sophisticated sovereign wealth funds seeking exposure. Exchange-traded funds (ETFs) – the modern signature of a mature market for better or worse – have arrived in force.
But there’s still a sense of the frontier about Vietnam that will not be entirely eroded by its inevitable accession to the top table of global portfolio flows. The pioneering names, both foreign and local, that have been absolutely instrumental to the market’s evolution are still here, still busy, still growing and still unearthing unlikely gems. Their continued relevance gives us a useful prism through which to view Vietnam’s story and it tells us something about the evolution of the country’s market, and where it goes next.
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