Vietnam is finally a FTSE emerging market—yet it’s the country’s banks, not its exporters, that’ll benefit most

Vietnam has officially been upgraded to an emerging market, an "important milestone" for the country, according to experts. However, this status could lead foreign investors to flock to its banks and securities firms rather than its exporters. The FTSE Russell, which provides the emerging market classification, added 27 Vietnamese companies, including those in the financial sector, to its global index.

Despite Vietnam's strong economic growth, particularly in exports, only a small fraction of these gains is reflected in listed companies. The upgrade may bring in $6 billion in capital, but Vietnam still needs to improve market infrastructure, transparency, and quality to retain investors. Currently, the VN-Index, Vietnam's benchmark, has dropped by 0.9% on its upgrade day, and trading turnover has declined significantly.