Vietnam Foreign Net Buying Hits USD 54.6M Ahead of FTSE Russell Upgrade

Overview

Foreign investors turned net buyers of Vietnamese equities in the week before FTSE Russell formally reclassifies Vietnam as a Secondary Emerging Market on Monday, September 21. Roughly VND 1.42 trillion (USD 54.63 million) of net purchases were recorded since the start of the week, according to Reuters. Vingroup (VIC) on HOSE, FPT and Hòa Phát (HPG) are among the 27 Vietnamese stocks FTSE identified in August as eligible for inclusion in the FTSE Global All Cap Index.

Key Facts

• Foreign investors net bought about VND 1.42 trillion (USD 54.63 million) of Vietnamese stocks since the start of the week, per Reuters.
• FTSE Russell’s upgrade to Secondary Emerging Market status takes effect Monday, September 21.
• FTSE estimates the reclassification could bring roughly USD 6 billion into the Vietnamese equity market.
• The transition will run across four phases and extend to 2027.
• SSI Research estimates passive FTSE-tracking funds will buy about USD 240 million of Vietnamese shares in the first tranche on September 18, before index changes take effect.
• 27 Vietnamese stocks qualify for the FTSE Global All Cap Index, including Vingroup (VIC), FPT and Hòa Phát (HPG).
• Year-to-date, foreign investors remain net sellers of about USD 3.65 billion of Vietnamese equities.

What Happened

Reuters reported that foreign interest in Vietnamese stocks rose this week ahead of the formal reclassification. FTSE CEO Fiona Bassett, speaking at a conference in Hà Nội before the effective date, said the milestone reflects significant progress Vietnam has made in strengthening its capital markets. The transition will be implemented in four phases through 2027.

SSI Research estimated that passive funds tracking FTSE indices would buy around USD 240 million of Vietnamese shares in the first tranche on September 18, ahead of the official index changes. Duncan Burns, head of Asia-Pacific investment management at Vanguard, said the asset manager expects to raise its Vietnam investment to about USD 2.5 billion over the next few years, from roughly USD 1.5 billion currently. Pankaj Mataney of Morgan Stanley said inflows could rise materially above USD 2.5 billion once active funds begin allocating to Vietnam. Craig Martin, chairman of Vietnam-focused Dynam Capital, described the FTSE upgrade as a milestone on the path toward greater foreign investor recognition and participation, adding that the market remains relatively cheap with strong earnings growth.

Market Context

Vingroup (VIC) trades on HOSE at 241, unchanged on September 18 with volume of 1,261,400 shares. FPT closed at 74 on September 18, down 0.13% on volume of 5,284,000 shares, while Hòa Phát (HPG) closed at 21,200 on September 17. The three names span real estate, technology and steel, sectors that together anchor the large-cap segment of the HOSE. The upgrade expectation has helped restore foreign interest after a year in which foreign investors were net sellers of roughly USD 3.65 billion of Vietnamese equities, a reversal that has weighed on index performance and liquidity through 2026.

Strategic Significance

The FTSE upgrade changes the structural buyer base for eligible Vietnamese large caps. Passive funds tracking FTSE indices must mechanically add the 27 qualifying names, and the four-phase schedule through 2027 gives active managers a long window to build positions. For VIC, FPT and HPG, inclusion in the FTSE Global All Cap Index broadens the pool of index-tracking capital that can hold the shares without a Vietnam-specific mandate, which historically has been a constraint on foreign ownership. The parallel discussion of a central counterparty clearing mechanism, potentially operational as early as 2027, is the key gating item for a future MSCI reclassification, which would represent a second, larger wave of passive demand.

What to Watch

• The first FTSE tranche effective September 18 and the official index changes on September 21, including confirmation of actual passive flows.
• Foreign net flow data for the full week and month, to test whether the USD 54.63 million net buy pace persists after the effective date.
• Vanguard’s stated path toward roughly USD 2.5 billion in Vietnam exposure, and any further active-manager allocation announcements.
• Progress on the central counterparty clearing mechanism, targeted as early as 2027, as the precondition for MSCI market-access requirements.
• Q3 earnings and any foreign-ownership room filings for VIC, FPT and HPG as index inclusion approaches.