Upgrading securities: New impetus for foreign capital flows

The transformation from a "small lake"

It can be seen that the Vietnamese stock market's confirmation by FTSE Russell to be upgraded to Secondary Emerging Market in October 2025 is the result of many years of persistent institutional reform efforts. According to the representative of FTSE Russell, Vietnam has fully completed 9 necessary criteria, surpassing the "under review" status to move to the official implementation phase. This milestone not only has technical significance but also affirms the Government 's right direction in developing a transparent, safe and integrated capital market.

Economic and financial experts assess that the upgrade is considered a "complete piece" to strengthen investor confidence, not only in the short-term price cycle but also in the generational vision. "In the context of an economy with political stability, positive GDP growth and leading liquidity in Southeast Asia, the upgrade has created a solid foundation to attract foreign resources," Dr. Nguyen Tri Hieu, an economic expert, emphasized.

Nâng hạng thị trường: Việt Nam tiến vào — The upgrade is seen as the "finishing piece" that strengthens investor confidence.

According to FTSE Russell, the 12-month period from the announcement to the official launch, expected in September 2026, is a decisive period. This is not a waiting period, but a step to prepare the infrastructure and operations for the entire ecosystem. During this period, funds specializing in tracking frontier markets will gradually divest, while funds that follow emerging market indexes will begin to prepare the necessary procedures and processes to access Vietnam.

International institutional investors have very clear requirements such as the brokerage, custody, and operation system must allow them to trade through the global brokerage model used for other emerging markets, instead of having to design a specific set of procedures for Vietnam. The less "process friction", the higher the ability to attract capital flows. Thus, the remaining job for Vietnam is to deploy the technology so that the upgrade event operates smoothly in the global capital system.

Removing "process friction" to welcome a new capital cycle of 15-20 times

The story of upgrading the market does not lie in short-term price fluctuations, but in the scale and quality of the "ocean of capital" that Vietnam is entering. Mr. Hieu believes that the capital flow following marginal indexes is only a very small part compared to the amount of assets under management linked to emerging market indexes. By shifting groups, Vietnam is stepping out of the "small lake" to integrate into a potential market that is 15-20 times larger in terms of the scale of passively pursued capital. The fact that the market did not immediately increase after the announcement, but entered a state of accumulation, is a healthy sign, showing that the market is "digesting" information and waiting for the completion of infrastructure.

Economic and financial experts agree that, in order to maximize the benefits from the "capital tsunami" expected to form in the next 12-36 months, management agencies are synchronously deploying solutions to create institutional and infrastructure breakthroughs.

According to information from the Ministry of Finance, the Ministry and the State Securities Commission are actively completing the legal framework for supervision. Specifically, the management agency is widely soliciting opinions on the Draft Circular amending regulations related to transaction supervision and compliance supervision. The main objective of updating the regulations is to improve the capacity to detect and handle violations, thereby ensuring the market operates fairly, transparently and safely.

Along with institutional improvement, the development of payment infrastructure is considered a key factor in removing technical barriers. Law No. 56/2024/QH15 has provided a legal basis for the establishment of a subsidiary company to implement the Central Counterparty (CCP) mechanism. This CCP mechanism will help eliminate pre-transaction margin requirements - one of the biggest obstacles for international institutional investors.

In addition, in order to attract and retain large capital flows, FTSE Russell also recommends that Vietnam should not stop at upgrading but should aim to diversify its products. The need for depth of goods, from the number of listed stocks, new IPOs, to index and derivative products, is very urgent to increase the attractiveness and liquidity of the market in the new period.

Talking to reporters about this story, a representative of Asia Pacific Securities Joint Stock Company shared: "We appreciate the Government's efforts in thoroughly resolving technical barriers. For emerging index simulation funds, Vietnam's elimination of 'process friction' and especially the pre-deposit requirement will be a signal to free up capital flows. September 2026 is not only a technical milestone but also the time when Vietnam officially opens the big door to welcome passive capital flows. The scale of 15-20 times emerging capital compared to marginal capital will create a breakthrough, not only for the stock market but also promote the equitization process, improve the quality of corporate governance.

The market upgrade is not the final destination but the beginning of a new growth cycle. This is a golden opportunity for Vietnam to affirm its position as an attractive, transparent market and a strategic destination in the global capital flow./.

Source: https://vtv.vn/nang-hang-chung-khoan-luc-day-moi-cho-dong-von-ngoai-100251208150133434.htm