Vietnam’s stock market officially reclassified as an emerging market by FTSE Russell

TCDN – FTSE Russell has announced that Vietnam’s stock market will be upgraded from frontier to secondary emerging market status, effective in early September 2026.

In the early hours of October 8 (Vietnam time), shortly after U.S. markets closed on October 7, FTSE Russell released its September 2025 Country Classification Review.

In this report, the index provider highlighted Vietnam’s progress in expanding access to global brokerage services — a key factor for international funds replicating benchmark indices.

Previously, Vietnam had not met two key technical criteria: Delivery versus Payment (DvP) settlement and failed trade processing costs. However, since November 2024, Vietnam has implemented the Non Pre-funding Solution (NPS) trading model, which allows foreign institutional investors to purchase shares without full pre-funding. At the same time, a mechanism for handling settlement failures has been established, improving transparency and operational efficiency in post-trade activities.

“The FTSE Russell Index Governance Board (IGB) acknowledges Vietnam’s progress in market development and confirms that Vietnam now meets all the criteria for classification as a Secondary Emerging Market,” the announcement stated.

FTSE Russell also recognized the efforts of Vietnamese regulators to enhance trading infrastructure, enabling foreign institutional investors to trade directly with global brokers, there by reducing counterparty risks and strengthening market credibility.

Nonetheless, the organization noted that access to international brokers in Vietnam remains limited. While this is not a mandatory condition for reclassification, FTSE emphasized that such access is important to support full integration and bring Vietnam closer to global standards in terms of market openness and liquidity.

According to FTSE Russell, the reclassification will be implemented in multiple phases, depending on Vietnam’s continued progress. The firm will further consult with the international investment community and monitor the operation of new trading mechanisms ahead of the March 2026 review, to ensure official reclassification by September 2026.

This milestone marks more than a decade of efforts to reform Vietnam’s legal framework, technology infrastructure, and trading standards — moving the country closer to the group of fully recognized emerging markets.

According to securities firms, the upgrade could attract net foreign inflows of USD 6–8 billion, and possibly up to USD 10 billion in an optimistic scenario, including both active and passive funds.

However, analysts warned that short-term price rallies may cause market volatility, especially among speculative stocks. Investors are advised to focus on companies with strong fundamentals and real business projects to mitigate risks during potential post-upgrade corrections.

FTSE Russell’s recognition of Vietnam as a secondary emerging market not only affirms the maturity and credibility of its stock market but also opens the door to larger global capital inflows. This achievement reflects over ten years of reform, laying the foundation for Vietnam’s market to rise regionally and become more attractive to international investors.

FTSE Russell is one of the world’s three leading index providers, alongside MSCI and S&P Dow Jones Indices. Its indices are widely used by global investment funds, financial institutions, and asset managers for benchmarking and portfolio management.

FTSE Russell classifies global equity markets into four categories: Developed, Advanced Emerging, Secondary Emerging, and Frontier. Currently, 13 countries are classified as secondary emerging markets, including major Asian economies such as China, India, Indonesia, the Philippines, and Qatar.

According to Tạp chí Tài chính doanh nghiệp

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