Hot: FTSE Russell officially upgraded Vietnam's stock market

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

On the morning of October 8 (Vietnam time), FTSE Russell announced the FTSE Stock Country Classification Report for September 2025. Accordingly, the Vietnamese stock market was officially upgraded from Frontier Markets to Secondary Emerging Markets. This is a historic milestone marking the comprehensive reform efforts of the Vietnamese stock market after 7 years since September 2018, when Vietnam was put on the FTSE's watch list for upgrading.

Vietnam's stock market officially upgraded from frontier market to secondary emerging market

PHOTO: NHAT THINH

According to FTSE Russell, in November 2024, Vietnam implemented a trading model that allows foreign institutional investors to trade shares without requiring sufficient funds (Non Pre-funding solution - NPS). In addition, a process for handling payment errors has also been established to improve the market operation mechanism. "The FTSE Russell Index Governing Board (IGB) recognizes the progress that the Vietnamese market regulator has made in developing the market and confirms that Vietnam has met all the criteria for a secondary emerging market under the Equity Country Classification Framework," FTSE Russell said.

The agency also acknowledged Vietnam’s efforts in building a model that allows foreign institutional investors to trade directly with global securities companies, thereby approaching international standards, reducing counterparty risks and increasing investor confidence through reliable intermediary channels. FTSE Russell said the upgrade of Vietnam’s stock market is expected to be implemented in several phases. FTSE Russell will continue to monitor Vietnam’s improvements and consult the international investment community before the March 2026 review, to ensure the upgrade is implemented on schedule in September 2026.

The upgrade will help the Vietnamese stock market have the opportunity to attract billions of dollars of foreign investment capital. According to Mirae Asset Securities, the capitalization scale of VN-Index is quite similar to several countries with low allocation proportions in the FTSEE merging markets Index portfolio. This company estimates that the proportion of Vietnam in the basket will be about 0.7% when officially added. Typically, Vanguard FTSEE merging Markets ETF has a scale of nearly 83 billion USD. With an allocation proportion of 0.7%, Vietnam can be disbursed at about 581 million USD. Synthesizing a number of ETF funds using FTSE Emerging markets Index as a reference, with an allocation proportion of 0.7%. Vietnam can receive an estimated investment of about 622 million USD. Moreover, foreign capital flows into Vietnam not only come from funds using the FTSEE merging markets Index as a reference, but also attract other foreign capital flows... HSBC estimates that after being upgraded, Vietnam could account for about 0.6% in the FTSE Asia Index and 0.5% in the FTSE Emerging Markets, potentially attracting about 1.5 billion USD from passive funds. In a more optimistic scenario, capital flows from passive funds could reach 3 billion USD, along with 1.9 - 7.4 billion USD from active funds.

However, investors should note that foreign capital will not flow in immediately because the transition process takes time and the upgrade decision will not officially take effect until September 2026.

Source: https://thanhnien.vn/nong-ftse-russell-chinh-thuc-nang-hang-thi-truong-chung-khoan-viet-nam-185251008055339467.htm