HANOI – The VN-Index, Vietnam’s benchmark stock market index, surged by over 12 points following news of its potential market upgrade by FTSE Russell. The index closed at 1,697.83 points, marking the highest closing level in the 25-year history of the Vietnamese stock market.
Investor sentiment was buoyed by the official announcement from FTSE Russell, which classified Vietnam for an upgrade. This enthusiasm was evident at the market open, with strong buying pressure pushing the VN-Index up by 15 points to briefly touch the 1,700-point mark.
However, the initial momentum faced an early headwind as profit-taking emerged. This selling pressure narrowed the index’s gains, leading to a volatile midday session where the index fluctuated around its reference level and even dipped slightly. Vietcap Securities noted that the morning session lacked a definitive breakout as some investors chose to “sell the news” and foreign investors continued their net selling streak at that time.
Late-Day Rally Secures Record Close
The market’s choppy movement came to an end in the final 30 minutes of the afternoon session. A rush of capital into large-cap stocks sparked a strong rebound, driving the VN-Index to its record close of 1,697.83 points. This new high surpasses the previous record close of 1,696.29 points set just a month prior.
On the Ho Chi Minh City Stock Exchange, gainers outnumbered losers, with more than 180 stocks advancing versus 120 declining. Following the midday correction, several blue-chip stocks regained momentum, closing up more than 1% from their reference prices.
- Banking stocks led the charge, with CTG and STB rising by 2.5% and 2.4%, respectively.
- In the securities group, SSI increased by 1% to 41,200 Vietnamese Dong, recording exceptional liquidity of over 2,220 billion Dong (approximately $87 million).
- Steel giant HPG saw a recovery, closing 0.7% above its reference price at 29,200 Dong.
- The Vingroup conglomerate showed mixed results: VHM and VRE soared over 3.7%, contributing a combined 5 points to the VN-Index. Conversely, VIC fell 1.1% to 178,100 Dong, subtracting nearly 2 points from the index.
Foreign Investors Break Selling Streak
Market liquidity saw a significant boost, rising by about 7,000 billion Dong from the previous session to a total of over 32,800 billion Dong (approximately $1.29 billion). Large-cap stocks accounted for over 18,200 billion Dong of this total. Five stocks on the Ho Chi Minh City floor—SSI, HPG, SHB, VIX, and MWG—each recorded liquidity exceeding one trillion Dong.
A notable positive development was the end of a 15-consecutive-session net selling streak by foreign investors. The group invested 4,413 billion Dong while selling 4,200 billion Dong, resulting in a modest net buy. Foreign capital was primarily focused on stocks such as HPG, HDB, and GEX.
Upgrade to Unlock Billions in Foreign Capital
Analysts widely agree that the market upgrade will help Vietnam attract substantial international capital. Some domestic securities firms estimate that between $6 billion and $8 billion in foreign capital could flow into the country. The global investment research division at HSBC suggests the figure could reach as high as $10.4 billion in the most optimistic scenario.
These estimates include both active and passive fund capital. However, the actual inflow is expected to be phased over time, as FTSE typically provides several months’ notice before implementing a change in a market’s classification. The historic close signals a strong reaction by the domestic market to the prospects of greater global integration and institutional investment.
