Vietnam stock market upgraded to emerging status

THE HANOI TIMES — FTSE Russell has announced that Vietnam’s stock market will be upgraded from a frontier market to a secondary emerging market in early September 2026.

The decision was included in FTSE Russell’s periodic classification report released earlier today.

According to the organization, the upgrade will officially take effect on September 21, 2026, contingent upon the outcome of its review in March 2026. This review will assess whether Vietnam has made sufficient progress in improving access for global investors.

“The FTSE Russell Index Governance Board (IGB) acknowledges Vietnam’s progress in market development and confirms that the country now meets all the criteria for the secondary emerging market category,” the statement said.

The IGB noted that it had reviewed feedback from the Market Classification Advisory Committee regarding restrictions faced by foreign investors when trading in Vietnam. While this was not a mandatory condition, improving foreign investor accessibility remains essential for a successful reclassification.

FTSE Russell added that it will continue to closely monitor developments and collect stakeholder feedback ahead of the March 2026 assessment to ensure the upgrade proceeds as planned. The detailed roadmap for implementation will be announced during the March 2026 review.

Following FTSE Russell’s decision, the State Securities Commission of Vietnam (SSC) stated that the upgrade marks a milestone in Vietnam’s stock market.

“It reflects the comprehensive reform efforts made by the entire securities sector in line with the Party and the Government’s directions to develop a transparent, modern and efficient market that meets the highest international standards,” stated the stock market watchdog.

The SSC described this reclassification as the beginning of a new stage of development that calls for broader reforms to achieve long-term goals. As the state regulator for securities and the stock market, the SSC affirmed its commitment to working closely with FTSE Russell to ensure the transition proceeds according to plan.

“The SSC will continue to provide the best possible conditions for domestic and foreign investors to access the market in addition to improving the legal framework, modernizing market infrastructure and enhancing efficiency of Vietnam’s stock market to deepen its integration into the global financial system,” the regulator said.

In the same round, FTSE Russell also upgraded Greece from an advanced emerging market to a developed market. The decision will also take effect on September 21, 2026, and Greece will not require an additional review in early 2026.

FTSE Russell is one of the world’s three leading index providers, alongside MSCI and S&P Dow Jones Indices. Its index products are widely used globally by asset managers, financial institutions, banks, and other investment organizations.

FTSE Russell classifies global stock markets into four tiers: developed, advanced emerging, secondary emerging and frontier. Currently, 13 markets fall under the secondary emerging category, including several Asian economies such as China, India, Indonesia, the Philippines and Qatar.

The upgrade goal was outlined in the government’s Stock Market Upgrade Scheme, approved a month ago, which targets a transition to secondary emerging status under FTSE Russell’s criteria within this year.

In the longer term, by 2030, Vietnam aims to meet MSCI’s “emerging market” standards and FTSE Russell’s “advanced emerging market” classification.

Before this review, Vietnam had yet to meet requirements related to settlement cycles and failed trade handling costs. Since last year, the Ministry of Finance and related agencies have implemented a series of reforms to remove barriers.

New regulations have been issued to ensure equal market access for foreign investors. These include Circular No. 68, which removes the pre-trade margin deposit requirement for foreign institutional investors, and Circular No. 03, which simplifies account-opening procedures for foreign investors.

Since early May, market regulators have also launched a new IT system to meet foreign investment fund requirements, laying the groundwork for introducing a central counterparty clearing (CCP) mechanism in the primary market and for developing new products and services aligned with international standards.

The upgrade is expected to attract a significant inflow of international capital into Vietnam’s stock market. Domestic securities firms estimate potential foreign investment between US$6 and $8 billion. HSBC Global Research suggests that under an optimistic scenario, the figure could reach up to $10.4 billion.

These projections include both active and passive fund inflows, though actual investments will be distributed over several phases as FTSE Russell announces changes months before reclassification takes effect.

According to analysts, the reclassification news is a major catalyst supporting the VN-Index’s upward momentum in the final months of the year.

The benchmark index currently stands around 1,685 points, up nearly 420 points (33%) since the start of the year, just 26 points below its all-time high.