Vietnam upgraded to Emerging Market status by FTSE Russell: a milestone in financial modernization
Vietnam has reached a pivotal milestone in its financial evolution. FTSE Russell, a leading global index provider under the London Stock Exchange Group, has officially upgraded Vietnam to Emerging Market status, effective September 21, 2026. This decision follows years of reform and modernization, and reflects growing investor confidence in the country’s capital markets.
The upgrade is expected to unlock significant foreign investment as global funds tracking emerging market indices will begin to reallocate capital. Vietnam’s benchmark VN-Index has already surged 33% this year, making it Southeast Asia’s best-performing stock market.
FTSE Russell cited key reforms that enabled the upgrade, including the removal of full pre-funding requirements for foreign investors and the launch of a centralized clearing system. These changes align Vietnam’s market practices with international standards, reduce counterparty risk, and enhance accessibility for global brokers.
Beyond capital flows, the implications are broad:
· Increased foreign participation will likely improve liquidity and price discovery.
· Vietnamese equities may see upward valuation adjustments as risk premiums shrink.
· Vietnam joins regional peers like Indonesia and the Philippines in the emerging market category, enhancing its global standing.
While short-term volatility may arise from portfolio rebalancing and currency sensitivity, the long-term trajectory points toward deeper integration and sustained growth. Continued reforms are expected in digitalization, transparency, and legal infrastructure.
This upgrade is not just a classification change, it’s a recognition of Vietnam’s strategic progress and a catalyst for its future in global finance.
With strong expertise in capital markets and cross-border transactions, our team stands ready to assist investors and corporates navigating Vietnam’s evolving financial landscape. To learn more, contact our Capital Markets team: partner Étienne Laumonier (laumonier@apflpartners.com) and associate Huynh Huong Giang (huynh.huong.giang@apflpartners.com).
Disclaimer: This newsletter and its content are for informational purposes only and do not constitute legal advice. Readers should seek legal or professional advice before taking or refraining from any action.
