Vietnam's stock market officially upgraded to secondary emerging status

VHO - Vietnam affirms its new position and can attract billions of dollars from abroad when its stock market is officially upgraded by FTSE Russell.

Vietnam's stock market has been officially upgraded from a frontier market to a secondary emerging market. Illustrative photo

Early morning October 8, Vietnam time, right after the US stock market closed the trading session on October 7, FTSE Russell announced the National Stock Classification Report for September 2025.

Vietnam has been officially upgraded from a frontier market to a secondary emerging market, after more than a decade of comprehensive reforms, according to the report. The effective date is expected by FTSE Russell to be September 21, 2026, following a mid-term review in March 2026.

In this review, FTSE Russell focused on Vietnam’s progress in expanding its trading capabilities through global securities companies, an important factor that international investment funds that replicate the index are particularly interested in.

Previously, Vietnam was still stuck with two technical criteria: payment cycle (DvP) and transaction error processing costs. However, since November 2024, Vietnam has deployed the Non-Pre-funding Solution (NPS) transaction model, allowing foreign institutional investors to buy stocks without having to deposit enough money in advance. A process for handling transaction errors has also been established, increasing the transparency of the system.

"FTSE Russell Index Management (IGB) recognises Vietnam's progress in improving its market and confirms that Vietnam meets all the criteria for secondary emerging market status," FTSE Russell announced.

FTSE Russell appreciates the efforts of Vietnamese regulators in upgrading trading infrastructure, allowing foreign institutional investors to trade directly with global securities companies, thereby reducing counterparty risks and increasing market reliability.

However, the organization also noted that access to international brokers in Vietnam is still limited. Although this is not a mandatory condition for upgrading, FTSE believes that this is a necessary factor for the integration process to take place fully, helping the Vietnamese market to get closer to international standards in terms of openness and liquidity.

Being recognized as a secondary emerging market by FTSE Russell is a historic milestone, affirming the position and maturity of the Vietnamese stock market after more than 10 years of legal reform, technology and trading standards.

According to securities companies, the upgrade could help Vietnam attract a net inflow of 6-8 billion USD, or even up to 10 billion USD in a positive scenario, including both active and passive capital flows. This opens the door to attracting global capital flows and increasing its attractiveness in the eyes of international investors.

However, the short-term price increase after the upgrade news can create strong fluctuations, especially in the group of stocks with high speculative factors. Investors are advised to choose businesses with solid financial foundations and practical projects to avoid risks when the market has an adjustment after the excitement period.

According to the plan, the upgrade will be implemented by FTSE Russell in several stages, linked to Vietnam's improvement progress. At the same time, in the coming time, FTSE will continue to consult the international investment community and monitor the operation of the new mechanism before the review in March 2026, ensuring the official upgrade in September 2026.

Source: https://baovanhoa.vn/kinh-te/chung-khoan-viet-nam-chinh-thuc-duoc-nang-hang-len-moi-noi-thu-cap-173222.html