According to updated information on September 30 from Vietcap Securities, next week will be an important time for the Vietnamese stock market. FTSE Russell will announce the results of the semi-annual stock market classification assessment in September 2025 on October 8 (after the US stock market closed on October 7), and announce the possibility of Vietnam being upgraded from the Border Market to the Secondary Newly emerging Market.
The company said it is currently very confident that FTSE Russell will announce a positive result for Vietnam next Wednesday.
Which FTSE Russell criteria are still barriers?
According to Vietcap, the Payment cycle (DvP) criterion: Currently, it is still at the "Restricted" level (need to achieve "achieving" - " Pass" to be upgraded). This criterion is related to the requirement for a deposit before transactions for foreign institutional investors (ie, there must be enough money at T+0 for purchase orders). The Ministry of Finance issued Circular 68 in November 2024 to remove this requirement and introduce a new process of not requiring a deposit before transactions (NPF).
Over the past 11 months, FTSE Russell has assessed the effectiveness of the NPF process and recorded feedback from market participants. Vietcap believes that this criterion can be raised to the "Appearance" level.
Payment criteria - costs related to failed transactions: Raised from "Unrated" to "Restricted" in March 2025 (need to reach "Reachable" to be upgraded). After implementing NPF, a failed transaction handling process was established with a clear explanation of the important terms and related costs.
Vietnam recorded the first and only case of failed transactions in December 2024. Domestic securities companies (CTCKs) have complied with procedures and handled them successfully. This failed transaction also acts as a testing situation for FTSE Russell to confirm the practicality of the failed transaction handling process. Vietcap believes that this criterion can now be raised to the "Appearance" level.
Has FTSE Russell made a final decision?
Vietcap said that up to now. The decision has not been made and there is no relevant voting mechanism, contrary to the false rumors spread by some domestic stock exchanges.
FTSE Russell held two official meetings this month: the FTSE Market Classification Advisory Board on September 2 and the FTSE Russell Policy Advisory Board on September 18. The FTSE Market Classification Advisory Board includes market experts with technical expertise in transactions, portfolio management and deposits, while the FTSE Russell Policy Advisory Board includes senior personnel at investment management companies, investment consultants and asset owners. The identity and views of the above expert team are confidential and not shared with the public.
The FTSE Market Classification Advisory Committee officially reviews the countries on the Monitoring List (including Vietnam) for upgrading/relegation. FTSE Russell's recommendations were submitted to the FTSE Russell Policy Advisory Board. FTSE Russell then submitted a request for confirmation from the FTSE Russell Policy Advisory Board for the recommendations, which were then shared with the FTSE Russell Index Management Board for final approval. The FTSE Russell Board meeting took place this week.
There will be about 30 Vietnamese stocks in the investment portfolios of index funds
In FTSE's Annual Report on Stock Market Classification in September 2025, FTSE Russell will announce the reclassification of the Vietnamese stock market and attach a link to FAQ - Vietnam. This FAQ page will detail the implementation plan, including the number of implementation rounds and days, a list of 10-15 expected stocks of Vietnam that will be included in the index and the expected proportion of Vietnam on different indicators.
After the announcement, index funds will start the process of opening accounts (including registering a stock trading code) for corresponding funds. It is very likely that the implementation will be divided into 4-5 rounds at the end of each quarter. The first list addition is expected to be implemented no earlier than March 2026.
The upgrading of the Vietnamese market to the Secondary Newly Floating Market will be a positive supporting factor, counterweighting the large net selling force of foreign investors, which is on track to reach more than 9 billion USD from 2023 to 2025.
Based on Vietcap's research, Vietnam is expected to have a share of 0.3% in the FTSE Emerging Markets All Cap China A Inclusion Index in addition to being included in other FTSE indices.
About 30 Vietnamese stocks will be added to the investment portfolios of index funds. Capital flow from passive funds may reach at least 1 billion USD during the implementation process. FTSE Russell screened eligible stocks based on different criteria such as the requirement for minimum foreign ownership ratio, scale, liquidity and free transfer ratio ( view quarterly; any violated criteria can be excluded from the index).
