(Reuters) -Index provider FTSE Russell has upgraded Vietnam to emerging market status, subject to an interim review, in a long-awaited move that could see foreign investors plough billions of dollars into Southeast Asia’s best-performing stock market.
FTSE Russell said on Tuesday that Vietnam’s upgrade from frontier status would be effective on September 21, 2026 and was subject to an interim review in March 2026 to determine whether enough progress had been made in enabling access to global brokers.
The index provider, which added Vietnam in 2018 to its list of markets monitored for an upgrade, noted the progress made by Vietnamese market authorities in evolving its market.
The Communist-run country has adopted key reforms in recent months, including removing last year the full pre-funding requirements on equity transactions for foreign investors, which was a key precondition for the FTSE upgrade.
FTSE Russell said the move was expected to align the country’s market practices with international standards, reduce counterparty risk, and strengthen investor confidence.
“The official recognition and upgrade of Vietnam’s securities market is clear evidence of the country’s sound development path and its growing capacity to integrate deeply into the global financial system,” Vietnam’s Finance Minister Nguyen Van Thang said in a statement.
Vietnam’s benchmark stock index has surged 33% this year, making it the best-performing stock market in Southeast Asia. The index has hit record highs multiple times this year.
But foreign investors have been taking profits, selling stocks worth $2.6 billion in August and September. The upgrade to emerging market status could reverse the slide, with analysts estimating $3.5 billion to $5 billion in inflows.
FTSE Russell also reclassified Greece from advanced emerging to developed market status, effective September 21, 2026.
Meanwhile, Egypt has been added to a watch list for downgrade to frontier market status from secondary emerging market status over its failure to meet certain criteria in the index.
Nigeria was added to a watch list for a possible upgrade to frontier status from its current unclassified status after the market met the required criteria.
(Reporting by Ankur Banerjee in Singapore and Gursimran Kaur in Bengaluru; Editing by Franklin Paul and Jamie Freed)
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