FTSE Confirms Vietnam's Upgrade to Emerging Market Status

Vietnam to Join FTSE Russell's Emerging Markets Group

Vietnam will be included in FTSE Russell's secondary emerging markets group for the first time, marking a major milestone for the country's economy. This move will place Vietnam in the same league as other rapidly growing economies in Asia, including China, India, and Indonesia. The inclusion is expected to give a boost to the country's benchmark VN Index, which has underperformed most of its Southeast Asian peers this year.

According to estimates by FTSE Russell, the change may attract up to $6 billion in redirected inflows to the country. The index compiler had first indicated the upgrade from frontier status six months ago and has confirmed that Vietnam remains on track for reclassification following its latest review. The addition will be implemented in a four-tranche phased approach, beginning in September and concluding in 2027.

The phased implementation is designed to ensure an orderly market transition, manage the anticipated capital inflows, and support liquidity throughout the inclusion process. This move 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 has stated that his top priority is to secure peace and promote "rapid, sustainable national development."

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Vietnam has undertaken significant reforms in recent years to improve market accessibility. Authorities have 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 has listed Vingroup, Masan Group, FPT Corp., and Hoa Phat Group among potential joiners. The final lineup of eligible firms will be published before FTSE Russell's semi-annual index review in September. Vietnam is targeting annual growth of at least 10% this year but 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.