STOCKS | Vietnam Added to FTSE Russell Emerging Markets Index

Vietnamese stocks were added to the FTSE Russell emerging markets index on Monday, marking a major milestone after years of reforms aimed at attracting foreign capital. According to Sina Finance, FTSE Russell estimated that the inclusion could bring as much as $6 billion in inflows. Vietnam's VN Index opened 0.54% higher on Monday, led by bank shares, before easing slightly. According to Sina Finance, foreign investors bought 2.7 trillion Vietnamese dong worth of shares last week, but they still have a cumulative net selling position of about 91 trillion dong. Thomas Nguyen, head of global markets at SSI Securities, said market enthusiasm may fade after the initial excitement and that he expects the market to remain relatively sluggish as 2027 approaches. According to Sina Finance, the transition will take place in four phases through 2027, with 10% added in September, another 20% in March, and 35% each in June and September next year. Vanguard plans to raise its investment in Vietnam to about $2.5 billion over the next few years. According to Sina Finance, concerns remain over foreign ownership limits and the free-float requirements for some companies. The upgrade also revived expectations that MSCI may eventually raise Vietnam's market status. Investors said a central counterparty clearing mechanism expected to be introduced in 2027 could help Vietnam move closer to meeting MSCI market-access requirements.