Following the Fed’s anticipated interest rate cut, VNDirect anticipates market focus will shift to October 7th, when FTSE announces its decision on Vietnam’s potential upgrade to Secondary Emerging Market status. Concurrently, the Q3 earnings season for listed companies will provide clearer insights into the market’s profit growth prospects.
Regarding the upgrade process, VNDirect notes that the final months of 2025 will see continued efforts to meet the Pre-Funding and failed transaction cost criteria. Streamlining procedures to facilitate foreign investor participation in the Vietnamese stock market will also be prioritized. By October 2025, FTSE is expected to announce Vietnam’s upgrade to Secondary Emerging Market status.
In March 2026, FTSE will officially elevate Vietnam to Secondary Emerging Market status, increasing foreign ownership limits and piloting intraday trading, short selling, and other advanced trading mechanisms. By early 2027, CCP MSCI is projected to formally upgrade Vietnam to Emerging Market status.
In terms of capital inflows, an upgrade to FTSE’s Secondary Emerging Market status could attract approximately $1.0–1.5 billion in foreign investment from mutual funds and ETFs tracking FTSE indices. Stocks expected to benefit significantly from this foreign demand include
VIC, VHM, HPG, VCB, MSN, VNM, VRE, SSI, and VND.
Should MSCI also upgrade Vietnam to Emerging Market status, the country could see an additional $3 billion in foreign capital inflows. Combined, these upgrades could result in total inflows of around $4.5 billion.
To align with global market standards, the KRX system will not only support new products like intraday trading and short selling but also fundamentally transform market operations. Key improvements include (1) pre-trade margin requirements, (2) trading and settlement cycles, and (3) equal treatment for foreign investors.
VNDirect highlights that markets typically experience significant gains ahead of an upgrade. However, investors should exercise caution in the 1–2 quarters following the upgrade, as market volatility may increase.
The Most Invested Sectors by Vietnamese Businesses Abroad
This sector received 31.6% of the total investment capital from Vietnamese enterprises abroad.
