Vietnam's Stock Market Set for Major Boost as FTSE Russell Upgrades Classification
Vietnam's stock market is set for a significant boost as it will be reclassified from 'frontier' to 'secondary emerging' by FTSE Russell from September 21, 2026. This upgrade, subject to an interim review in March 2026, could lead to substantial foreign inflows and open the market to a new group of investors.
The reclassification comes after Vietnam met all criteria for 'secondary emerging' market status under FTSE Equity Country Classification Framework. Vietnamese Minister of Finance, Nguyen Van Thang, sees this as a testament to the country's sound development path and growing integration into the global financial system.
David Sol, global head of Policy at FTSE Russell, has congratulated Vietnamese market authorities on their progress. Anthony Le, deputy director of institutional client brokerage at Vietcap Securities, anticipates the upgrade will open the market to a new group of investors previously restricted from investing in Vietnam.
Gary Harron, head of securities services at HSBC Vietnam, expects significant foreign inflows following the reclassification, potentially ranging from $3.4 billion to $10.4 billion. HSBC estimates that an upgrade could lead to inflows of $3.4 billion, with $1.5 billion coming from passive funds once inclusion is completed. This is due to progress made by Vietnamese market authorities in evolving the market, including removing the prefunding requirement for foreign institutional investors and establishing a process for handling failed trades.
Institutional investors such as mutual funds, pension funds, and insurance companies will gain access to the Vietnamese stock market following the reclassification. While foreign ownership limits (FOL) remain a concern, the upgrade is expected to bring substantial benefits to Vietnam's financial landscape.
