FX.co ★ Vietnam Poised for FTSE Decision on Market Upgrade

Vietnam is on the verge of an important announcement from index provider FTSE Russell, expected this Tuesday. This decision could potentially elevate Vietnam's stock market to emerging market status, aligning it with countries like China and India. At present, Vietnam is categorized as a frontier market by FTSE and MSCI, which generally carries a perception of higher risk and limitations for institutional investors. An upgrade could lead to substantial foreign investments. Last month, FTSE indicated that the announcement would be made post-U.S. market closure on October 7, during its annual review. This year, Vietnam’s benchmark index has surged around 30%, placing it among the top performers in Asia. Despite this, foreign investors have been net sellers, navigating through exchange rate fluctuations, a credit surge, and profit-taking activities. Since 2018, Vietnam has been under FTSE’s watchlist for potential reclassification. However, recent market reforms aimed at meeting index standards have led to increased optimism.