Vietnam's stock market upgraded to secondary emerging market

Securities companies have made many optimistic forecasts about the prospects of the Vietnamese stock market in the coming period. (Photo: TRONG HIEU)

Big turning point

On October 8, 2025, the market rating organization FTSE Russell announced that the Vietnamese stock market met all the official criteria and was upgraded from a frontier market to a secondary emerging market. This is an important milestone, recognizing the comprehensive reform efforts in the effort to implement the Party and State's policy to develop a transparent, modern, and efficient stock market according to the highest international standards.

This is also a turning point that opens a new development phase of the Vietnamese stock market with increasingly deep reform requirements, towards long-term goals in the future. The Committee will continue to coordinate closely with FTSE Russell, ensuring the official transition process is on schedule, while continuing to improve the legal framework, modernize and digitize the infrastructure, and promote deeper integration into the global financial market.

Following the announcement of the upgrade on 8 October 2025, FTSE Russell will continue to closely monitor market developments and encourage stakeholders to provide feedback ahead of the mid-term review in March 2026 to ensure the upgrade is implemented as planned in September 2026.

The preparation for upgrading has been in progress since 2018. At the time of being put on the upgrade watch list, there were two criteria that the Vietnamese stock market had not met, including “payment cycle” and “method-cost of handling failed transactions”. Therefore, in 2024, the Vietnamese stock market regulator implemented a non-margin trading model, officially eliminating the margin requirement for foreign institutional investors and establishing a formal process for handling failed transactions.

Notably, the FTSE Russell Index Governing Board (IGB) said it had considered the Market Classification Advisory Committee’s comments on restrictions on foreign investors trading in Vietnam. According to IGB, this is not a mandatory condition, but improving foreign access is essential for upgrading.

The FTSE Russell Index Governing Board (IGB) said it had considered the Market Classification Advisory Committee’s comments on restrictions on foreign investors trading in Vietnam. IGB said this was not a mandatory condition, but improved foreign access was essential for the upgrade.

Therefore, this opinion is still considered and acknowledged the current efforts of the Vietnam securities market management agency in building a model that allows foreign institutional investors to trade through partners who are global securities companies. This effort is expected to bring the Vietnamese market closer to international standards, minimize counterparty risks and increase investor confidence through establishing relationships with reputable intermediaries.

Opportunity to attract more international capital

Receiving positive information from FTSE Russell, securities companies have simultaneously made many optimistic forecasts about the development prospects of the Vietnamese stock market in the coming period. According to Director of Market Strategy, VPBank Securities Joint Stock Company (VPBankS) Tran Hoang Son, the upgrade will help Vietnam integrate more deeply into the global investment system, and can welcome strong foreign investment flows from passive and active funds.

VPBankS estimates that if Vietnam accounts for about 0.5% of the weight in the FTSE Emerging Market index basket, the total foreign capital flow attracted in the coming time could reach 3-7 billion USD. The appearance of new capital flows is expected to help the market increase liquidity with an average transaction value of 2-3 billion USD/session (the current average transaction value is about 860 million USD/session).

More importantly, the upgrade not only has financial significance but also contributes to strengthening the position and image of Vietnam's economy in the international arena. When foreign capital flows into the market, listed companies will have more motivation to make their financial reports transparent, standardize governance, expand capitalization and promote initial public offerings (IPOs). If the opportunity is well exploited, the stock market can become the main capital mobilization channel of the economy, contributing to the GDP growth target of more than 8% in 2025 and towards double-digit growth in the coming period.

Chairman of SSI Securities Corporation Nguyen Duy Hung commented that upgrading is just the beginning, the important thing for the stock market after this time is to compete fairly in FTSE and move towards upgrading to emerging market of MSCI (Morgan Stanley Capital International). According to HSBC Global Investment Research, the potential foreign capital flow is forecasted to be up to 3.4-10.4 billion USD after the Vietnamese stock market is upgraded.

According to the Ministry of Finance , the upgrade is one of many development goals to improve the efficiency of the stock market, making it an important capital mobilization channel for the economy, supporting the development of the capital market, facilitating capital mobilization for businesses and promoting economic development. According to Deputy Minister of Finance Nguyen Duc Chi, the upgrade is a continuous process that needs to be maintained in the long term with the ultimate goal of developing a stable and transparent stock market, effectively supporting the economy, businesses and the medium and long-term capital market.

PHUONG ANH

Source: https://nhandan.vn/chung-khoan-viet-nam-duoc-nang-hang-len-thi-truong-moi-noi-thu-cap-post913962.html