FTSE may upgrade Vietnam stock market status in Sept 2025: analysts

Global index provider FTSE Russell could upgrade Vietnam’s stock market status from “frontier” to “emerging market” in September 2025 based on measures taken to facilitate foreign trading, say researchers with brokerage house SSI.

The Ministry of Finance and the State Securities Commission (SSC) have unveiled a draft circular to amend four existing regulations, by which foreign institutions would be able to buy local equities without having sufficient cash at the time of purchase (non pre-funding solution – NPS). The amendments would also facilitate enhanced information disclosure in English.

Regarding the prefunding obstacle, the draft circular allows foreign institutional investors to buy equities at T+0 and get funding from securities companies at T+1 and T+2.

This provision will address upgrade requests from FTSE Russell, including delivery vs payments (transfer of shares at the time of payment) and the handling of failed transactions, SSI Research said in a recent note.

Under a roadmap set by the circular, from January 2028 onwards, all public and listed companies will release regular and “extraordinary” information in English.

This step will widen information access by foreign investors and increase market transparency while addressing a similar requirement from MSCI, a New York-headquartered global index provider.

With the circular expected to come into force in the final months of this year, the analysts anticipate FTSE Russell will have positive assessments for Vietnam next month and announce an upgrade for the nation’s stock market status in September 2025.

If Vietnam gets the status upgrade, exchange-traded funds (ETFs) can pour up to an additional $1.6 billion in Vietnamese shares, not to mention inflows from active funds, the SSI Research note says.

Echoing this, Ketut Ariadi Kusuma, senior financial sector specialist with Finance & Markets Global Practice, World Bank Group, said Monday that global funds may pour billions of USD into Vietnam’s financial market if the country’s stock market obtained the “emerging market” status upgrade.

The World Bank had earlier estimated that an additional $5 billion would be funneled into Vietnam if both MSCI and FTSE Russell upgraded the country’s stock market status.

“The inflows may rise to $25 billion by 2030 if reform momentum remains robust and the global investment environment remains sound,” it said.

In its June review, MSCI continued to classify Vietnam’s stock market as a frontier one, although it made an improvement in its rating for the transferability criterion on the back of increased uptake for off-exchange and in-kind transactions following regulation changes.

MSCI acknowledged that Vietnam was working on market development plans to address certain accessibility issues, such as foreign ownership limits, pre-funding requirements, and the lack of English disclosure of market information.

At the start of this year, analysts with Viet Dragon Securities noted that Vietnam needed to meet nine out of 18 qualitative criteria set by MSCI regarding market access.

The analysts forecast that Vietnam could qualify for MSCI’s watchlist for an upgrade between November 2024 and June 2025, and get upgraded in 2026 or 2027, if issues of liquidity, clearing and information disclosure in English were dealt with.