Vietnam Poised for FTSE Decision on Market Upgrade

FTSE Russell has reclassified Vietnam to emerging market status, pending an interim review in March 2026, with the change set to take effect on September 21, 2026. The move, long anticipated by investors, could channel billions of dollars into one of Southeast Asia’s best-performing stock markets. The index provider cited Vietnam’s significant progress in improving market access and aligning with global standards since it was added to the watchlist in 2018. Key reforms include the removal of full pre-funding requirements on equity trades for foreign investors, a major step toward the upgrade. FTSE Russell said the move would enhance transparency, reduce counterparty risk, and boost investor confidence. Vietnam’s Finance Minister Nguyen Van Thang called the decision “clear evidence of the country’s sound development path and growing capacity to integrate deeply into the global financial system.”

Vietnam is awaiting a key decision from index provider FTSE Russell on Tuesday that could see its stock market upgraded to emerging market status, joining peers such as China and India. Currently labeled a frontier market by both FTSE and MSCI—a classification viewed as riskier and restrictive for institutional investors—the potential upgrade could attract significant foreign inflows. FTSE said last month it would announce the outcome after the U.S. market close on October 7 as part of its annual review. Vietnam’s benchmark index has rallied about 30% this year, ranking among Asia’s best performers, though foreign investors have been net sellers amid exchange rate volatility, a credit boom, and profit-taking. Vietnam has remained on FTSE’s watchlist for reclassification since 2018, but optimism has grown following recent market reforms aimed at satisfying the index’s requirements.

The VN Index climbed 9 points, or 0.5%, to 1,405 in morning trade on Friday, extending gains from the previous session and reaching its highest level on record. The broad index tracked an upbeat session on Wall Street overnight, as fresh labor data raised expectations that the Federal Reserve will implement rate cuts this month. The upturn was driven by a surge in blue-chip stocks, with nearly all sectors trading in the green. Traders are now awaiting the US jobs report, due later today, to strengthen the case for a rate cut ahead of the Fed’s September 17 monetary policy meeting. However, sentiment was also tempered by caution ahead of key Vietnamese economic data set for release on Saturday, including consumer prices, trade data, and industrial production. Among the top performers were Vietnam Pesticide JSC 6.0%), Kon Tum Sugar JSC (4.3%), Ningh Binh Phosphate Fertilizer (3.5%), Ba Ria Hoa Power (2.7%), and Cuulong Fish JSC (0.8%).