A milestone after seven years of anticipation

On October 8, 2025, global index provider FTSE Russell officially announced that Vietnam has been upgraded from a Frontier Market to a Secondary Emerging Market — a landmark achievement that investors worldwide have awaited for over seven years.

According to FTSE Russell’s classification review, the upgrade will take effect on September 21, 2026, following an interim assessment in March 2026. This means Vietnam has met all nine mandatory criteria, paving the way for billions of dollars in new foreign capital to flow into its stock market.

From “candidate” to “chosen market”: the reform journey behind the success

Since being placed on FTSE Russell’s watchlist in 2018, Vietnam has carried out a sweeping series of reforms to align with international standards:

• Removed the pre-funding requirement, allowing foreign investors to place orders without depositing full cash in advance — a long-standing barrier to capital inflows.

• Upgraded trading and settlement infrastructure, moving toward a modern central counterparty (CCP) clearing model.

• Clarified foreign ownership limits (FOL) and simplified account-opening procedures for global investors.

• Issued the official “Market Upgrade Plan” (Decision 2014/QĐ-TTg) in September 2025, ensuring coordinated action between the Government, the Ministry of Finance, and the State Securities Commission.

David Sol, Global Policy Director at FTSE Russell, commented:

“Vietnam has made remarkable progress in market infrastructure, transparency, and accessibility for global investors.”

Billions in foreign capital on the horizon: the golden window for Vietnam’s market

According to Reuters and Vietstock, the upgrade could attract US $3.5 – 5 billion in new inflows from global exchange-traded and active funds tracking the FTSE Emerging Markets Index.

Highlights include:

• Major ETFs such as iShares FTSE Emerging Index and Vanguard EM ETF are expected to rebalance and add Vietnamese equities.

• Roughly 30–40 large-cap stocks on HOSE may qualify for FTSE’s benchmark basket, setting the stage for significant price momentum.

• Brokerage houses predict the VN-Index could gain 10–15 percent as foreign capital targets banks, real-estate developers, and consumer-goods firms.

Beyond the market: broader economic and reputational impact

National prestige elevated

Entering the “emerging-market club” is a passport to global capital.
It opens doors to multi-trillion-dollar institutional funds and strengthens Vietnam’s image as a credible, reform-driven economy integrated into the world’s financial system.

Stronger transparency and corporate governance

With international investors comes higher discipline.
Vietnamese listed companies will increasingly:

• Adopt IFRS accounting standards,

• Strengthen board oversight and disclosure,

• Commit to long-term transparency.

This shift lays the foundation for a more professional, trust-based investment ecosystem.

Modernized financial infrastructure

Regulators are accelerating the launch of the KRX trading system, which will enable T+0 settlement, short selling, fractional trades, and advanced derivatives.
These upgrades are essential stepping stones toward Vietnam’s next goal: achieving “Advanced Emerging Market” status.

The challenges beneath the spotlight

Transparency — no compromise

Being upgraded is only the beginning. FTSE Russell will continue to monitor Vietnam’s market quality and could reverse the rating if standards slip.
Maintaining transparency, consistent disclosure, and investor trust will be crucial to sustain this achievement.

Hot-money volatility and currency pressure

While new inflows create opportunity, they also pose risks:

• Global risk sentiment can quickly trigger outflows.

• Exchange-rate volatility (VND/USD) could rise if foreign funds withdraw abruptly.

Vietnam’s central bank and finance ministry must coordinate closely to maintain monetary stability and protect long-term investor confidence.

Absorptive capacity and domestic readiness

Not every company will benefit immediately. Only firms with large capitalization, liquidity, and robust governance will attract sustained capital.
Domestic investors, meanwhile, need to embrace long-term strategies rather than short-term speculation on the “upgrade story.”

Looking ahead: opportunity favors the prepared

Vietnam has crossed the threshold into “emerging-market” territory — yet sustaining the momentum will require continuous commitment:

• Deepening legal and structural reforms,

• Strengthening investor confidence, and

• Fostering a culture of professionalism within the market.

This is a moment for government bodies, corporations, and investors to align under a shared vision: building a capital market that is not just a trading venue, but the financial heartbeat of a globally connected Vietnam.

From being placed on FTSE’s watchlist in 2018 to achieving emerging-market status in 2025, Vietnam’s stock market has walked a long road of persistence and reform.

This milestone is not an ending but a beginning a launchpad for deeper integration, stronger transparency, and enduring investor confidence.
If Vietnam continues its path of reform and openness, the nation’s capital market could soon stand shoulder-to-shoulder with the world’s fastest-growing emerging economies.