 The FTSE Russell Index Governance Board has acknowledged Vietnam's progress in improving its market and confirmed that Vietnam has met all the criteria for the secondary emerging market group. (Illustration photo: VGP) |
According to Bloomberg, this will place Vietnam in the same group as China, India, Indonesia, the Philippines, and other major economies in FTSE Russell's ranking.
David Sol, Global Head of Policy at FTSE Russell, said the upgrade reflects significant improvements in Vietnam's market infrastructure. Since being added to a watch list in September 2018, Vietnam has carried out comprehensive reforms to align with international standards. FTSE Russell forecasts that the upgrade could attract up to 6 billion USD in foreign investment to Vietnam.
Commenting on the planned upgrade last month, Wanming Du, Head of Index Policy at FTSE Russell, said: "Within the FTSE Emerging All Cap Index, we project that Vietnam will represent around 0.3% of the index. It’s not a small rating if you look at the composition of the index. In Asia, it’s just below the Philippines, and in other regions, it’s actually higher than Colombia and the Czech Republic."
HSBC estimates that around 3.4 billion USD will flow into the Vietnam market. 38% of Asian investment funds and 30% of global emerging market funds already hold Vietnamese stocks. The VN-Index has surged 33% since the beginning of the year, reaching a record high on the back of strong economic growth and anticipation of the market upgrade.