Vietnam's stock market upgrade signals tide of capital: foreign news outlets
Hanoi (VNA) – FTSE Russell’s official decision to upgrade Vietnam’s stock market from “frontier” to “secondary emerging” status has drawn special attention from both the public and foreign financial experts.
A landmark move
Major newswires hail the upgrade as a watershed moment for Vietnam’s economy and finacial market. The Financial Times called the first such reclassification a potential magnet for billions of US dollars in equity investments. It quoted Bill Hayton, an associate fellow in Chatham House’s Asia Programme, who described the move as “pretty significant for Vietnam” and “another step towards being treated as just another international economy.”
Nikkei Asia, meawhile, quoted Gary Harron, head of Securities Services at HSBC Vietnam, as saying that for Vietnam, shedding the frontier label can profoundly reshape investors’ behaviour and confidence, altering the trajectory of its continued long-term economic development and reducing dependence on any single trading partner.
Hebe Chen, an analyst at Vantage Markets in Melbourne, told Bloomberg that FTSE Russell’s upgrade of Vietnam to the emerging-market status marks a watershed moment for Southeast Asia’s fastest-rising economy and equity story.
One key focus across major news outlets was Vietnam’s allure for foreign cash. While estimates vary, all point to a highly positive outlook.
The Financial Times cited Thuy Anh Nguyen, a Vietnamese fund manager at Dragon Capital, who estimated the shift could draw tens of billions USD in active investments and about 500 million USD in passive inflows.
Last year, the World Bank projected that upgrades from both MSCI, another index provider, and FTSE Russell could deliver 25 billion USD in net inflows by 2030, assuming reforms hold and global investment stays robust, the paper noted.
Nikkei Asia and Bloomberg both referenced HSBC forecasts showing Vietnam’s index inclusion could lure 3.4 billion USD from active funds and 10.4 billion USD more from passive funds. Reuters, for its part, reported analysts’ projections of inflows at 3.5–5 billion USD.
Reforms and remaining challenges
Foreign media outlets have unanimously underscored Vietnam’s relentless reforms, seen as a prerequisite for its upgrade.
The Financial Times noted that Vietnam has been on FTSE Russell’s watchlist for an upgrade since 2018 and undertaken a series of market reforms to qualify. It has broadly loosened regulations to make it easier for foreign investors to trade, ended some foreign ownership limits, and removed a requirement to fund transactions in advance.
Nikkei Asia highlighted Vietnam’s fulfillment of the last two hurdles: letting foreign buyers snap up shares without pre-funding and setting up a mechanism to handle failed trades. Reuters also lauded the removal of the full pre-funding requirement for foreign investors as a critical condition for the upgrade.
Both the Financial Times and Bloomberg mentioned Vietnam’s adoption of the Korea Exchange’s KRX trading infrastructure, an upgrade Bloomberg described as crucial to enhancing transparency and market infrastructure.
Yet, not every factor about an upgrade is positive, Bloomberg said. As of September, Vietnam held the largest weighting of about 32% in the FTSE Frontier Index. Moving into a secondary emerging market index would mean competing with bigger and more established countries, it added.
The Financial Times pointed out lingering hurdles for foreign investors, quoting Owens Huang, a portfolio manager at Dalton Investments, who said it can take months for investors to acquire the identification needed for the market, and foreigners pay a premium for shares of some companies due to limits on non-Vietnamese ownership.
In its upgrade announcement, FTSE also warned of “limited access for global brokers to trade in Vietnam”, a point Reuters and Nikkei Asia reported will be revisited in the March 2026 review.
Looking ahead, both the Financial Times and Bloomberg reported that Vietnam is aiming bigger: achieving an MSCI Emerging Market upgrade by 2030 and reaching FTSE’s “Advanced Emerging Market” status by then, too./.
