A key topic discussed at the recent Vietnam Access Days (VAD) conference was Vietnam’s upcoming stock market upgrade and its potential impacts on the country’s growth during 2026–2030. With clear ongoing progress from the Vietnamese government in terms of both regulatory and infrastructure reforms to meet global requirements, FTSE Russell has announced Vietnam’s upgrade to Secondary Emerging Market status with an effective date of 21 September 2026, subject to an interim assessment in March 2026.
This article is the third in our short series summarizing our observations from the event, following up on the latest update on our portfolio company Mobile World Corporation (MWG) – one of the most talked-about consumer names during the conference days. Below, we highlight key takeaways from the VAD discussions, on- and off-stage, regarding Vietnam’s stock market upgrade and what it implies for our portfolio.
According to Vietcap, FTSE Russell expects the inclusion to be phased, with details to be provided after the March 2026 interim assessment. As FTSE Russell has been working closely with Vietnamese regulators on finalizing the global broker model for the past six months, the March review is designed to confirm the readiness of the model, which allows international investors to trade without opening local accounts.
During the opening Market Development Panel titled “What Comes Next Following Vietnam’s Emerging Market Upgrade”, policy experts discussed Vietnam’s immediate priorities and implementation plans for the stock market ahead of FTSE Russell’s effective upgrade on 21 September 2026, with the expectation that the upcoming March review will confirm market readiness to proceed as planned.
The panel welcomed guest speakers Wanming Du (Policy Director, FTSE Russell), Lyndon Chao (Managing Director & Head of Equities and Post-Trade, ASIFMA), and Hang Le (Coordinator, Investment Advisory Group), and was moderated by Anthony Le (Head of Institutional Sales and Trading, Vietcap).
Panelists highlighted several practical priorities ahead of the effective date, including onboarding global brokers, ensuring foreign investors can access the market smoothly, and aligning operational processes with international index requirements. In simple terms, the easier it is for international investors to access and trade Vietnamese equities, the easier it becomes for global index funds to allocate capital at scale.
FTSE’s core criteria remain investability, tradability, and replicability. In practical terms, this places continued focus on free float availability and the level of information disclosure required from listed companies. While the Vietnamese stock market has over 1,600 listed names, only a limited number of businesses currently meet the scale and international accessibility standards for global index inclusion. Policymakers noted that expanding room for publicly traded shares and maintaining transparency would be key to sustaining index weight over time.
In parallel with policy reforms, the Market Development Panel discussed operational improvements to align settlement processes with international standards. For instance, parts of the current cross-border trading workflow still involve manual, time-consuming steps, which are expected to be enhanced by API connections between local custodians and global brokers to automate trade execution. Panelists also highlighted a new platform to reconcile balances between custodians and global brokers. This system is under development by the Vietnam Securities Depository and Clearing Corporation (VSDC) and is expected to roll out in March.
Beyond the September 2026 market upgrade, the establishment of a Central Counterparty (CCP) for Vietnam is scheduled for early 2027. The CCP model is expected to follow examples from more developed markets such as South Korea and Taiwan, using multilateral netting while maintaining reasonable margin requirements. Once implemented, the CCP will replace the current non-prefunding arrangement, which has been described as a temporary solution to facilitate foreign access.
From what we gathered from the panels as well as our conversations at VAD, the CCP is viewed by many as a critical component for both risk management and product development in an emerging market. Not only will it act as a central trading intermediary to reduce bilateral risks between buyers and sellers, it is also expected to broaden the stock market by enabling new functionalities such as day trading and short selling. In this context, 2026 will be a transition year for infrastructure and regulatory setup ahead of the CCP’s projected Q1/2027 launch in Vietnam.
Addressing recent foreign net outflows and future inflow forecasts, panelists noted difficulties in predicting the timing and magnitude of active fund allocations. However, based on past market upgrades in other countries, it was suggested that passive inflows from long-term index trackers, such as pension funds, tend to follow index inclusion. Based on passive allocations, Vietnam is currently projected to account for 0.34% of the FTSE Emerging All Cap Index, 0.22% of the FTSE Emerging Index, 0.04% of the FTSE Global All Cap Index, and 0.02% of the FTSE All-World Index.
Currency risk remains a consideration, as a conference participant raised a question about potential hedging strategies for investors seeking to manage foreign exchange (FX) exposure. In response, one panelist pointed out that a 2–3% annual depreciation of the Vietnamese Dong (VND) against the USD is generally manageable for long-term investors and is already factored into most return models. In other words, this level of depreciation is not seen as a structural obstacle. At the same time, active monetary management by the State Bank of Vietnam (SBV), together with potential rate cuts from the US Federal Reserve (Fed), could help ease FX pressure. Vietcap expects the USD/VND exchange rate to stabilize further, forecasting around 2% annual depreciation in both 2026 and 2027.
The panel also briefly discussed foreign ownership limits (FOL) and how listed companies are assessed in this aspect. It was shared that FTSE Russell monitors headroom levels of each company on a quarterly basis and may adjust scoring if available foreign capacity declines below certain thresholds. In our view, this mechanism reinforces the importance of optimizing ownership structures among large-cap names, such as those making up approximately 60% of our holdings. While Vietnam has over 1,600 listed companies, FTSE Russell’s screening indicates that only a smaller group currently meets global index eligibility requirements, suggesting significant room to attract additional foreign capital.
On the following day of the conference, we also attended the PM Panel “Where Does Vietnam’s Market Go from Here?” featuring Tuan Nhan (Deputy CEO, Vietcap), Thu Nguyen (Deputy CEO, VinaCapital), Dr. Tuan Le (CEO & Chief Investment Officer, Dragon Capital), and Petri Deryng (Founder & Portfolio Manager, PYN Elite Fund). This gave us additional insight into the stock market upgrade from the perspectives of other portfolio managers, who also shared our conviction in Vietnam’s medium- to long-term prospects.
Our view aligns with the panel that the market upgrade would mainly serve as a structural catalyst rather than a short-term valuation driver. To capitalize on this change, Vietnamese listed companies should uphold global standards for corporate governance and reporting, as well as maintain strong balance sheets and scalable business models.
In terms of sector allocation, consumer retail was repeatedly highlighted as a high-potential sector with strong earnings visibility and room for growth acceleration in 2026. With macro conditions supportive of income growth and infrastructure expansion, panelists noted that capital is likely to remain selective and concentrated in market-leading businesses.
At Kenno, the majority of our investment portfolio stands to benefit from high-level consumer trends forecast for 2026. In the past year, we have continuously increased our exposure to high-quality, representative large-cap companies that we believe will benefit the most from index inclusion and from the next upcycle of the stock market.
For a more detailed write-up on sector analysis or portfolio company updates, stay tuned for upcoming publications in the “Kenno at VAD 2026” series in our blog section. Most recently, we covered DMX’s planned IPO in 2026. If you have any questions or would like to discuss investing in Vietnam, feel free to reach out to us.