Global index to unlock local bourse

Vietnam is currently at the top of many foreign investors’ agendas

Citi and global index provider FTSE Group last week introduced the FTSE Vietnam Accessible Index, taping the burgeoning international interest in the southeast Asian nation, one of the world’s fastest growing economies.
“FTSE provides index solutions for other ASEAN markets and is able to customise indices for new markets like Vietnam,” said Paul Hoff, managing director at the London-based FTSE.
The FTSE Vietnam Accessible Index Series looks at the top 80 per cent of stocks listed on the Ho Chi Minh City Stock Exchange with shares available to international investors.
“The index is first to meet the objectives - a Vietnam benchmark which is liquid and reflects foreign ownership restrictions. It is also a highly investable and a representative index to meet international investor needs,” said Justin Kennedy, managing director of Citi Global Markets Asia.
FTSE is not the only global index provider who wants to develop a Vietnam index. MSCI Barra has previously expressed an interest in doing so.
“MSCI Barra has received questions regarding frontier markets, including Vietnam and would certainly communicate publicly if, when, and for which markets, to decide to develop new standalone indices,” said Gwenn Daniels, a spokeswoman for MSCI Barra.
MSCI Barra tracks stock indexes in developed and emerging markets including mainland China, Hong Kong, Taiwan and Thailand.
FTSE Group services clients in 77 countries worldwide.
Vietnam’s stock price index shot up 144 per cent in 2006 and the market is set to expand further with 20 large state-owned enterprises scheduled to list in 2007.
Foreign stock holdings are in the order of $4 billion, out of the total market capitalisation of $24.4 billion by March, according to a World Bank report.