Vietnam is due to join the FTSE Emerging Markets (EM) Index for the first time after satisfying critical requirements which had kept it limited to “Frontier” status for more than a decade. Progressive improvements to market accessibility, settlement systems, liquidity, and investor protection have paved the way — if maintained, they could lead to sustained international investment and cement its oft-repeated reputation as one of Asia’s most promising investment destinations.
That’s an opportunity and a responsibility for a country still reforming its markets for global investor transparency, trust and access.
Emerging market status to take effect in September 2026
Vietnam has been upgraded to “Secondary Emerging Market” status in a long anticipated move which could unlock billions in additional foreign investment capital, and provides early validation on an ambitious, multi-year reform agenda by the government to align the country’s securities markets with international standards.
The October 7 announcement was revealed by global index provider FTSE Russell as part of its semi-annual country classification review, with the upgrade from “Frontier” to “Secondary Emerging market status” due to take effect on September 21, 2026.
That official upgrade is conditional on an interim review in March next year to verify progress — especially focusing on whether global brokers have been sufficiently enabled to access the market.
In a shared statement with FTSE Russell, Vietnam’s Minister of Finance Nguyen Van Thang noted the upgrade as validation the country was on the right track.
“The official recognition and upgrade of Vietnam’s securities market is clear evidence of the country’s sound development path and its growing capacity to integrate deeply into the global financial system,” Mr. Nguyen said.
“The Ministry of Finance remains committed to advancing deeper and broader reforms, maximising accessibility for both domestic and international investors, while accelerating the modernisation and digitalisation of its market infrastructure – with the objective of establishing an increasingly transparent and efficient market.”
FTSE Russell Global Head of Policy David Sol noted Vietnam’s progress in aligning with international standards had culminated in an important milestone for the country.
“The reclassification of Vietnam reflects the implementation of key market infrastructure enhancements, and we look forward to continued collaboration to ensure sustained progress ahead of the target reclassification date in September 2026.”
Upgrade projected to unlock billions, boost investor confidence
Vietnam’s benchmark VN Index (VNI) reportedly surged 30 per cent this year in anticipation of the announcement, driven by strong domestic growth.
Vietnam had been on the FTSE “watch list” since 2018, with the government implementing a multi-year markets reform program to systematically address issues which had been flagged by the FTSE.
The pivotal upgrade could now potentially unlock USD $5-6 billion in capital inflows to Vietnam according to leading investment management firm VinaCapital, in a market milestone reminiscent of the country’s more than decade-long accession process to the World Trade Organization in 2006.
VinaCapital notes the USD $5-6 billion figure, while seemingly modest, is important in the context of three consecutive years posting net foreign outflows of USD $8.5 billion.
“While these figures may not appear exceptionally large in absolute terms, they represent a meaningful and positive shift for Vietnam,” the research note provides.
Such inflows would not only improve market liquidity but also enhance investor confidence and support the broader development of Vietnam’s capital markets.
Dynam Capital Chairman, Craig Martin, shared that the reclassification could trigger “a significant influx of foreign capital,” with projections on passive inflows from ETFs and active funds sitting at the USD $4-10.4 billion range across the 12-18 month horizon.
The implications, summarized:
- Short-term impacts likely to be minimal while Vietnam continues progress on reforms to secure official reclassification in 2026.
- Mid-term improvement in global positioning and visibility for Vietnam in international markets.
- Long-term increase to market depth and liquidity, reducing trading costs and improving investor confidence and sentiment.
- Provides validation on the Vietnamese government’s reform agenda, designing for a more transparent and accessible financial market.
- Pressure and scrutiny to uphold the integrity of reforms will increase with international classification.
While the reclassification to emerging market status is an important turning point for Vietnam, analysts say it’s important to reframe the milestone as a starting point rather than a destination.
The ultimate view, according to VinaCapital, is to expand Vietnam’s stock market from 75 per cent of GDP currently to 120 per cent by 2030. And more ambitious analysts would say the far bigger prize lies in securing MSCI Emerging Markets status, an index serving an estimated USD $1.4 trillion in assets and far exceeding the FTSE EM Index’s USD $150 billion benchmark.
Meanwhile, the Vietnamese government pushes ahead with a comprehensive plan endorsed under Decision 2014/QD-TTg for short and long-term reforms to fast-track the stock market upgrade and remove barriers for foreign participation.
And while the work continues, some experts warn the upgrade will carry with it “a risk of downgrades” and increased scrutiny if market stability is not maintained. That’s a responsibility Vietnam must rise to meet as it paves the way towards its September 2026 milestone.