A new circular that has removed pre-funding requirements for foreign institutional investors buying and selling stocks on Vietnam stock exchanges kicked in at the start of the month.
Tuoi Tre is covering the expectations of market watchers that this will give the market a welcome boost, however, these hopes are largely pinned to an upgrade from a frontier to an emerging market on the back of said reform. An upgrade, however, is far from guaranteed.
There is more on that here: Vietnam’s Stock Market Upgrade Opportunity: Unpacked
Dau Tu Online on the other hand is suggesting that local securities firms with large cash buffers stand to benefit most. This stems from requirements that securities firms essentially act as guarantors for foreign investors, covering trades in the event a foreign institution doesn’t front up the cash. Ergo, more money means they can offer bigger advances.
VN Economy, conversely, has pointed out that after coming into effect there have still been large net cash outflows from the market from foreign investors. The publication then rehashes past speculation on why foreign investors might be selling out of the local exchange including Thai tax reforms on investments made outside of the country and interest rate differentials.
There is more on that here: Vietnam’s Foreign Investor Stock Sell-Off: Unpacked