HANOI: Vietnam's Ho Chi Minh Stock Exchange officially launched its new trading system on Monday (May 5), as the country pushes to unlock emerging market status and boost foreign investment.
The new system, known as KRX from Korea Exchange, is expected to shorten the settlement cycle and increase trading capacity, according to an earlier statement from the State Securities Commission.
"The new system will establish the foundation for a central clearing counterparty system," said Nguyen The Minh, head of research at Yuanta Securities Vietnam.
Both the MSCI and FTSE indices currently classify Vietnam as a frontier market, which prevents many funds, family offices, and others from investing in companies listed there.
FTSE will hold its next regular review in September. Vietnam has been on FTSE's watchlist for a possible upgrade since 2018.
Vietnam's benchmark stock index rose slightly on Monday morning, reaching 1,232 as of 0243 GMT.
Last November, Vietnam removed a requirement for overseas investors to fully prefund equity trades, one of the longstanding barriers to its potential upgrade.
The KRX had faced multiple delays due to regulatory and technical roadblocks.
"KRX can enhance market liquidity and pave the way for the launch of other new financial products including day trading, short-selling and derivatives, which will better benefit investors," Minh said.
According to Minh, the system has been functioning properly so far, but it may take investors some time to get accustomed to it. - Reuters
