Vietnam will be included in FTSE Russell’s secondary emerging markets group for the first time, propelling one of Asia’s fastest growing economies into the same league as China, India and Indonesia.
The index compiler, which had first indicated the upgrade from frontier status six months ago, confirmed Vietnam remains on track for reclassification following its latest review. The inclusion may give a boost to the country’s benchmark VN Index, which has lagged most Southeast Asian peers this year. FTSE Russell had estimated that the change may add up to $6 billion in redirected inflows to the country.
The addition will be done in a four-tranche phased implementation, beginning in September and concluding in 2027, the index compiler said in a statement. This phased approach is designed to ensure an orderly market transition, manage the anticipated capital inflows, and support liquidity throughout the inclusion process.
“This marks a major milestone for the market after nearly a decade on the watchlist, supported by key structural improvements such as the global broker mechanism, 2024 non-prefunding mechanism and the formalization of failed-trade handling,” said Tyler Manh Dung Nguyen, chief market strategist at Ho Chi Minh City Securities.
The development comes after Vietnam’s National Assembly elected Communist Party chief To Lam as president on Tuesday, consolidating the country’s top party and state roles in a rare concentration of power. Lam said his top priority is to secure peace and promote “rapid, sustainable national development.”
Vietnam has undertaken sweeping reforms in recent years to improve market accessibility. Authorities removed pre-funding requirements for equity trades, advanced plans for a centralized clearing system by 2027 and allowed foreign investors to trade via global brokerages, among other measures.
FTSE Russell estimates Vietnam’s weight in its emerging market index at approximately 0.23%–0.35%, based on data as of March 27 this year. The index compiler listed Vingroup, Masan Group, FPT Corp. and Hoa Phat Group among potential joiners. The final lineup of eligible firms will be published before FTSE’s semi-annual index review in September.
Vietnam, which is targeting annual growth of at least 10% this year, is navigating escalating tensions in the Middle East and uncertainty over US tariff policy. Economic momentum slowed in the first quarter as rising energy costs and price volatility added to inflationary pressures, complicating Lam’s push for double-digit growth.
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