Vietnam Stocks Rebound as FTSE Russell Reclassifies to Secondary Emerging Market

On September 22, Vietnam's stock market showed a strong recovery from the previous day's decline, following FTSE Russell's reclassification of the market to a "secondary emerging market." The VN-Index rose by 17.26 points (0.96%) to close at 1816.93 points, surpassing the psychological barrier of 1800 points. This rebound was significantly supported by major real estate sector stocks such as VIC (Vingroup) and VHM (Vinhomes). Market participants express optimism that this reclassification by FTSE Russell will serve as a "pass" to attract billions of dollars in foreign investment. However, market liquidity, or trading volume, decreased compared to the previous day, raising concerns that the current upward trend might be driven by expectation rather than underlying demand. While Vietnam's stock market's move to the "emerging market" category enhances long-term growth prospects, establishing a stable market based on actual demand remains a key challenge ahead. Under its one-party system, Vietnam prioritizes economic growth, with attracting foreign investment being a crucial policy objective. This market reclassification can be seen as part of these efforts. Nevertheless, challenges persist, including geopolitical tensions with China and the need for further domestic infrastructure development and legal reforms. The impact of these factors on future market movements will be closely watched.