Vietnam's stock market upgraded: Expected to boom thanks to billion-dollar cash flow

VTV.vn - The upgrading of Vietnam's stock market to a secondary emerging market is expected to open up foreign capital flows worth billions of dollars, increase liquidity, and strengthen the position...

Historical milestone

On the morning of October 8, FTSE Russell officially upgraded Vietnam's stock market from Frontier market to Secondary Emerging market after 7 years of being on the watch list.

The upgrade will be implemented in stages. FTSE Russell said it will continue to monitor developments closely and will conduct a mid-term review in March 2026 to ensure the upgrade can proceed as planned in September 2026.

"The upgrading of Vietnam's stock market to a secondary emerging market is the beginning of a new development phase, requiring deeper and broader reforms to achieve long-term goals in the future," said the State Securities Commission.

As the State management agency of securities and the securities market, the Securities Commission said it will continue to closely coordinate with FTSE Russell to ensure the official transition process follows the roadmap.

The stock market operator also pledged to continue implementing comprehensive solutions to create maximum conditions for domestic and foreign investors to access the market. At the same time, it will complete the legal framework, modernize and digitize the infrastructure, aiming to develop the Vietnamese stock market to be increasingly transparent and effective, promoting deeper integration into the global financial market.

According to the Securities Commission, the upgrading of Vietnam's stock market to a secondary emerging market is the beginning of a new development phase.

Commenting on the event, Mr. Anthony Le, Deputy Director of Institutional Brokerage Department at Vietcap, said that with this decision, Vietnam has been placed in the same category as larger markets such as China, India, Saudi Arabia and Indonesia.

Vietcap representative said that this historic milestone not only demonstrates the determination of the Securities Commission in meeting the index criteria of FTSE Russell but also signals a new era of growth potential for the Vietnamese market. The upgrade will create conditions for access to the Vietnamese market for investors who were previously restricted from investing here.

Sharing the same view, Mr. Gary Harron, Head of Securities Services, HSBC Vietnam, assessed that FTSE Russell's upgrading of Vietnam's stock market from frontier to secondary emerging is proof that Vietnam's rising international position can firmly overcome short-term storms. The new status is a recognition of the joint efforts of the Government , management agencies and market participants.

Billions of dollars are about to flow into the market

According to Mr. Gary Harron, "removing the "frontier market" label will have a big impact on investor behavior and confidence, change the long-term economic development trajectory of the market and reduce dependence on any one trading partner," said Mr. Gary Harron.

HSBC Global Investment Research forecasts potential foreign capital flows of up to $3.4 billion to $10.4 billion from active and passive investment funds after the upgrade.

Sharing the same view, Mr. Tran Hoang Son, Director of Market Strategy at VPBank Securities JSC (VPBankS), based on the experience of similar countries (such as Saudi Arabia and Kuwait), the upgrade could have a positive impact on the Vietnamese stock market, including attracting strong foreign investment flows from passive and active investment funds.

Based on the assumption that all stocks in the FTSE Vietnam index will be included in the FTSE Emerging Markets Index, it is estimated that the value of passive and active capital flows into the Vietnamese market will be about 3-7 billion USD after the upgrade decision.

The upgrade will also improve liquidity and market efficiency. The removal of pre-funding requirements will encourage institutional investors to participate. This could help the market increase daily trading value to 2-3 billion USD, making the market more stable and reducing volatility.

In addition, Mr. Tran Hoang Son emphasized that Vietnam's economic image and position in the region will also be enhanced, while promoting economic and business growth. Larger capital flows will support businesses to promote IPO activities, new listings to increase the amount of goods for the market and expand the scale of capitalization.

HSBC Global Investment Research forecasts potential foreign capital flows of up to US$3.4 billion to US$10.4 billion from active and passive investment funds after the upgrade.

"The stock market will become a more effective capital mobilization channel, contributing to the GDP growth target of over 8% in 2025 and double digits in the 2026-2030 period. This is also a push to help businesses promote reforms, improve operating standards and improve corporate governance capacity," said an expert from VPBankS.

Overall, the upgrade would not only bring financial benefits but also promote structural reforms, helping Vietnam move closer to its high-income target by 2045.

Vietnam is currently aiming to be included in the MSCI watchlist by June 2026, aiming for an official upgrade to emerging market status by June 2027. To fully meet MSCI standards (stricter than FTSE) and maintain the Emerging ranking, the Prime Minister issued Decision 2014 approving the Project to Upgrade the Vietnamese Stock Market (September 2025), with a 4-phase roadmap to 2030.

Source: https://vtv.vn/chung-khoan-viet-nam-duoc-nang-hang-ky-vong-bung-no-nho-dong-tien-ty-usd-100251008102740506.htm