Hanoi (VNA) – At 3 am (Hanoi time) on October 8, Vietnam’s financial community received a major announcement that global index provider FTSE Russell officially upgraded Vietnam’s stock market from “Frontier” to “Secondary Emerging Market” status.
The move marks the culmination of more than a decade of comprehensive reform, ushering in a new stage of growth, deeper global integration, and promising stronger foreign investment inflows.
A decade of comprehensive reform
According to the State Securities Commission (SSC), the upgrade is a historic milestone that recognises the efforts of the entire securities industry in realising the Party and State’s vision for a transparent, modern, and efficient capital market aligned with international standards.
This achievement stems from the direction by the Government and the Ministry of Finance, close coordination with the State Bank and other ministries, and active support from the World Bank and FTSE Russell.
Pham Tuyen, Brokerage Director at KIS Vietnam Securities, said the recognition is well-deserved after more than ten years of reform, demonstrating the Government’s determination and close guidance.
Vietnam was first placed on FTSE Russell’s Watch List for possible upgrade in September 2018. At that time, the country failed to meet two key criteria - “Delivery versus Payment (DvP)” and “Failed Trade Management,” both rated as “Restricted.”
By November 2024, Vietnam implemented a non-pre-funding trading model, allowing securities companies to guarantee capital for foreign investors - removing one of the biggest barriers to foreign participation. Improvements in settlement failure handling also helped the market meet all upgrade criteria.
During the Minister of Finance’s visit to London, the Vietnamese delegation held over 100 meetings with international investors. FTSE Russell and the London Stock Exchange commended Vietnam’s reform efforts, noting that few markets have engaged such high-level participation from the government.
Entering global playing field
Officials stress that the upgrade is not just a title but a recognition that Vietnam is ready to compete on the global stage, where stricter standards and higher levels of professionalism apply.
FTSE Russell is still reviewing the role of global brokers in Vietnam, which is crucial for international index replication. Vietnam is now working on mechanisms to allow institutional investors to trade through global partners - a key step toward full international alignment.
The upgrade will take effect on September 21, 2026, after a mid-year review in March 2026, giving Vietnam time to finalise cooperation frameworks with global brokers.
“This is a broader, more transparent, and more competitive playing field that demands financial strength and high professional standards — and I believe we can meet those challenges,” said Tuyen.
He suggested that new decrees, or even laws, be issued to fully align with FTSE standards, enhance market liquidity, and ensure listed firms publish transparent, internationally compliant financial reports.
Stronger capital inflows expected
Experts believe the upgrade will act as a “fresh breeze” drawing stronger foreign investment into Vietnam’s market.
The upgrade news will boost market sentiment, potentially reduce foreign net selling, and open a new growth cycle, Tuyen said, noting that several investment funds have already prepared capital for deployment once the upgrade takes effect including both active and passive funds.
Dang Thanh Tung, Operations Director at Dragon Capital, said the move will place Vietnam firmly on the radar of major global financial institutions. Despite recent selling pressure, he noted that foreign capital has begun returning - a trend likely to accelerate with the upgrade.
According to SSC Vice Chairman Bui Hoang Hai, foreign investors appreciate Vietnam’s increasing transparency. Initiatives like market restructuring, institutional investor development, and the establishment of a Central Counterparty Clearing (CCP) model reduce risk and enhance confidence.
Le Duc Khanh, Director of Analysis at VPS Securities, forecast that 2025 could see daily liquidity reach 2–3 billion USD, potentially pushing the VN-Index to 1,800 points.
Meanwhile, Do Minh Trang, Director of Market Strategy at ACBS, projected the index could climb to 2,000–2,100 points within six months if positive factors persist.
Sustaining reform momentum
SSC vice chairman Hai emphasised that upgrading the market is not the final goal, but part of a broader effort to enhance the efficiency of capital mobilization and allocation.
Market upgrade is only one component in the overall strategy for developing Vietnam’s capital market to serve economic growth, he said.
Experts agree that Vietnam must address legal bottlenecks, upgrade market infrastructure, diversify products, and ensure corporate transparency. Priority areas include completion of the KRX system, improvement of settlement cycles, and development of derivatives and covered warrants.
The SSC, as the nation’s top securities regulator, will continue advising the Government and the Ministry of Finance to refine policies, fully meet FTSE criteria, and bring Vietnam’s stock market closer to international standards./.
