The Vietnam stock market broke records in 2025, driven by exceptional earnings growth, robust GDP expansion, foreign investor inflows, and transformative reforms. The VN-Index reached new highs, up 60% YTD, buoyed by the potential upgrade from frontier to emerging market status by FTSE Russell. This reclassification has fuelled strategic capital flows and expanded Vietnam’s visibility across global asset allocators.
Reclassification to Emerging Market: Vietnam’s push for FTSE Russell upgrade meets strict criteria: adoption of non-prefunding (NPF) settlement, improved market accessibility, and enhanced disclosure standards. The KRX system launch in May improved overall market operations. Announcement from FTSE Russell in due early October 2025.
GDP Expansion: Vietnam’s GDP posted 7.52% growth in H1 2025, the fastest first-half pace in 15 years. Growth was led by services (up 8.14%), manufacturing, and solid FDI inflows, which jumped 32% YoY to $21.5 billion.
Earnings Growth: Companies achieved earnings growth forecasts of 32% in 2025 and a projected 19% for 2026, with the top 100 stocks expected to grow EPS by 13%, keeping the P/E ratio attractive at around 11x–12x.
Passive and active funds tracking the FTSE Emerging Markets Index could inject $5–7 billion following official inclusion. Increased allocations, ETF flows, and strategic investments are already observed.
The combination of robust earnings, economic growth, policy reforms, and the anticipated FTSE upgrade position Vietnam as one of Asia’s most interesting equity markets.
