FTSE Russell upgrades Việt Nam to secondary emerging market status

FTSE Russell upgrades Việt Nam to secondary emerging market status

The upgrade is expected to take effect on September 21, 2026, subject to an interim assessment in March 2026 to confirm Việt Nam’s progress in improving market access through global brokers.

Following the upgrade, international brokerages estimate that net foreign inflows could range between US$6 billion and $10 billion in a positive scenario. — VNA/VNS

FTSE Russell has officially announced that Việt Nam will be reclassified from frontier to secondary emerging market status, marking a major milestone for the country’s capital market after more than a decade of reforms.

The announcement was made early on October 8 (Hà Nội time), following the close of US markets on October 7, as part of the index provider’s September 2025 Country Classification Review.

The upgrade is expected to take effect on September 21, 2026, subject to an interim assessment in March 2026 to confirm Việt Nam’s progress in improving market access through global brokers.

According to FTSE Russell, Việt Nam has addressed key technical barriers that previously prevented the upgrade, including settlement cycles and the handling of failed trades. In late 2024, the country introduced a non-pre-funding trading model, allowing foreign institutional investors to purchase shares without fully pre-depositing funds.

A mechanism to resolve settlement failures was also established, bringing Việt Nam’s trading practices closer to international standards.

The index provider noted significant improvements made by Vietnamese regulators, confirming that the country now meets all secondary emerging market criteria.

However, it also highlighted limited access to global brokers as an area that still needs attention. While not a formal requirement for reclassification, FTSE Russell said enhanced access is crucial for foreign investors to replicate indices effectively.

The upgrade will be implemented in stages, with FTSE Russell continuing to monitor Việt Nam’s market reforms and gather feedback from international investors before the March 2026 review to ensure the transition remains on schedule.

"The official recognition and upgrade of Việt Nam's securities market is clear evidence of the country's sound development path and its growing capacity to integrate deeply into the global financial system," Việt Nam's Finance Minister Nguyễn Văn Thắng said in a statement.

Việt Nam's benchmark stock index has surged 33 per cent this year, making it the best-performing stock market in Southeast Asia. 

The reclassification is expected to attract billions of dollars in foreign capital from both active and passive funds. International brokerages estimate that net foreign inflows could range between US$6 billion and $10 billion in a positive scenario.

Historically, markets often see stronger liquidity in the months leading up to an upgrade, followed by a period of adjustment after the announcement.

The State Securities Commission (SSC) said the upgrade is a key milestone that recognises Việt Nam’s comprehensive reforms to build a transparent, modern and efficient market aligned with global standards. 

“This achievement reflects the Government’s strong leadership, close coordination among agencies, and valuable support from the World Bank, FTSE Russell experts and global investors,” the SSC said in a press release. 

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