FTSE Upgrade: VIC, VHM, HPG to Lead Vietnam Passive Inflows

Overview

Vietnam’s inclusion in FTSE’s Global Equity Index Series (GEIS) is expected to trigger significant passive foreign inflows, with VIC, VHM, and HPG projected to receive the largest allocations. The capital will be deployed in four tranches from September 2026 to September 2027, starting with a 10% allocation in the first phase. This marks a milestone for Vietnam’s equity market, enhancing its appeal to international investors.

Key Facts

• FTSE adds 27 Vietnamese stocks to its GEIS, including large-caps VCB, VIC, VHM; mid-caps BID, HPG, VPB; and 21 small-caps.
• BSC estimates $1.47 billion in total passive inflows across four tranches, with VIC receiving $241.7 million, VHM $117.2 million, and HPG $102.9 million.
• The top three stocks (VIC, VHM, HPG) account for approximately 31.5% of the total expected capital.
• In a bullish scenario, total inflows could reach $2 billion, with VIC at $653.9 million, VHM at $242.1 million, and HPG at $123 million.
• SSI Research projects a larger base-case inflow of $2.2 billion, assuming Vietnam’s weight in FTSE Emerging All Cap stays around 0.49%.
• The first tranche in September 2026 is expected to bring about $221 million (SSI estimate), with subsequent tranches of $442 million, $773.5 million, and $773.5 million.
• The deployment will not occur in a single session; funds may rebalance over a period around the effective date.

What Happened

FTSE Russell officially announced the inclusion of 27 Vietnamese stocks in its Global Equity Index Series, a move that will compel passive funds tracking these indices to adjust their portfolios. The announcement, covered by VnExpress, details that the capital will be allocated in four phases: 10%, 20%, 35%, and 35% from September 2026 to September 2027. The first tranche is considered certain, while subsequent ratios may be reassessed by FTSE.

According to BSC Securities, the base-case scenario sees $1.47 billion distributed across the 27 stocks, with VIC, VHM, and HPG receiving the largest shares. SSI Research offers a more optimistic base case of $2.2 billion, emphasizing that the actual market impact depends on how the buying compares to each stock’s average daily liquidity. Thomas Nguyễn, Director of Foreign Markets at SSI, noted that the effect on prices is not just about the dollar amount but also the number of days of normal trading volume that the purchase represents.

Market Context

VIC closed at 220,500 VND on August 25, 2026, on the HOSE, while VHM traded at 73,600 VND and HPG at 21,800 VND. These stocks have been among the most liquid on the exchange, making them prime candidates for index inflows. The FTSE upgrade comes amid a broader recovery in Vietnamese equities, with the VN-Index showing resilience. The passive inflows are expected to provide additional support, though the phased deployment may temper immediate price spikes.

Strategic Significance

For long-term investors, the FTSE upgrade signals Vietnam’s growing integration into global financial markets, potentially attracting not only passive but also active foreign investment. The concentration of inflows in VIC, VHM, and HPG underscores their status as blue-chip leaders in their sectors—real estate, steel, and banking. This could enhance their liquidity and valuation multiples over time. However, the actual impact will depend on how efficiently funds execute their rebalancing, as well as on broader market conditions and corporate fundamentals.

What to Watch

• The first tranche deployment in September 2026: monitor actual foreign net buying volumes around the effective date.
• FTSE’s reassessment of subsequent tranche ratios: any changes could alter the expected inflow distribution.
• Quarterly earnings reports from VIC, VHM, and HPG to assess whether fundamentals justify the increased foreign interest.
• Liquidity trends in these stocks: higher average daily volumes may reduce price impact per dollar of inflow.
• Any regulatory or policy changes affecting foreign ownership limits or market access.