HANOI: Vietnam’s benchmark stock index has hit a record high as the government and investors alike welcome FTSE Russell’s announcement that the country was set to be upgraded to emerging market status.
The upgrade from frontier market status, a designation that prevents many passive funds from buying shares of locally listed companies, is expected to unlock billions of dollars in foreign investment as well as kick-start its initial public offering market.
It puts Vietnam on par with markets like India and China, and follows market-friendly reforms by the Communist-ruled South-East Asian country.
The decision is “a milestone for the Vietnamese market – opening the door for a new phase of development,” Vietnam’s State Securities Commission said in a statement.
The main stock index climbed 2% in early trade to hit a record high of 1,735, though it later pared some of those gains and was last down 0.1%.
It is up by a third for the year to date, and is the best-performing stock market in South-East Asia by a wide margin.
FTSE Russell projected that Vietnam would see US$6bil in redirected inflows following the upgrade, which will be effective Sept 21, 2026 pending an interim review in March. — Reuters
