Will newly IPO stocks be allocated new capital flow from the market upgrade?

Will companies that underwent IPOs from the second half of last year to the early months of this year—such as TCX, VPX, HPA, GEL... alongside DMX, LPS, DVV, AMY... and exchange-listing transfer candidates like MCH...—meet the time criteria to benefit from the new capital flow resulting from Vietnam's stock market upgrade?

Will Newly IPO'd Stocks Also Be Allocated Capital?

According to analysis by Vietcap Securities (HOSE: VCI), newly IPO'd stocks will be added to the FTSE GEIS index series under the same phased allocation proportions, provided they pass standard screening criteria—primarily investable market capitalization equal to or exceeding approximately $483 million, along with liquidity, free float rate, and foreign room.

"Among recent IPO deals, TCX, VCK, and MCH met the criteria and were included in the basket. Meanwhile, VPX, GEL, and HPA have not yet met the requirements, with investable market capitalizations of only around $404 million, $304 million, and $54 million respectively—below the required threshold despite having sufficient liquidity," Vietcap noted.

FTSE Russell will upgrade Vietnam from Frontier Market to Secondary Emerging Market status within the FTSE Global Equity Index Series (GEIS) and related indices, effective at the open of trading on Monday, September 21, 2026. This decision was confirmed during the March 2026 mid-year review and announced on April 7, 2026, concluding a monitoring period that began in 2018.

Vietcap updated that the March 2026 mid-year review confirmed Vietnam had made sufficient progress to be upgraded, driven by improvements in the Global Broker access model—allowing foreign institutional investors to trade through global securities firms acting as counterparties.

This progress was supported by Circular 08/2026/TT-BTC and enhancements to the Non-Pre-Funding (NPF) mechanism.

According to Vietcap, Vietnam will be removed from the FTSE Frontier Index Series in a single step during the September 2026 annual review, while its addition to FTSE GEIS will be implemented in multiple phases.

Implementation Roadmap

The inclusion of Vietnam into the FTSE Global Equity Index Series (GEIS) will take place across four phases from September 2026 to September 2027 to ensure an orderly transition and allow the market time to absorb anticipated inflows, while liquidity and NPF mechanisms continue to be refined.

(Source: Vietcap)

After each phase, FTSE Russell will evaluate fund index replication capabilities before proceeding to the next stage.

Estimated capital inflows—based on the assumption of total passive inflows into the Vietnamese market—are projected by Vietcap to reach approximately $1.5 billion once the index inclusion rate reaches 100%.

For example, at the stock level: A stock with a 49% free float will be added to the index at a weight of 4.9% in Phase 1, 14.7% in Phase 2, 31.85% in Phase 3, and reach the full 49% in Phase 4, Vietcap analysts explained.

Regarding ETFs and passive capital flows, Vietcap estimates there are approximately $1.4 trillion in assets under management (AUM) across passive funds tracking relevant FTSE indices.

When the inclusion rate reaches 100%, passive capital inflows into Vietnamese equities are estimated at around $1.5 billion, corresponding to Vietnam's projected weight in each respective index.

Why Are More Stocks Expected to Receive Billion-Dollar Inflows?

Vietcap forecasts that 29 Vietnamese stocks will qualify for inclusion in the index, comprising 4 Large Cap, 5 Mid Cap, and 20 Small Cap stocks.

Previously, FTSE's official indicative list (FAQ)—built on data as of December 31, 2025—included 23 stocks. Vietcap noted that its 29-stock forecast utilizes updated data through June 30, 2026.

The gap of several months regarding stock prices, free float, liquidity, and foreign room altered the list of eligible stocks.

Specifically, 4 stocks were in FTSE's indicative basket but not in Vietcap's forecast: BSR, DGC, GEE, and KDH. For instance, KDH and BSR no longer meet the minimum investable market capitalization threshold based on current data.

Conversely, 10 stocks were in Vietcap's forecast but not yet on FTSE's list: VPB, MCH, VPL, HDB, TCX, VCK, SSB, MSB, TPB, and HCM, as they now satisfy criteria under updated data. Several recent IPO stocks appear within this group.

Note that the final official list will be announced by FTSE Russell on August 21, 2026, based on data finalized as of June 30, 2026.

"Vietcap screened market data up to June 30, 2026, against regional thresholds and FTSE index weights as of March 31, 2026. Therefore, the forecast may differ slightly from FTSE's official database, but it represents the closest estimate until the final announcement," the analysis team added.

Addressing investor queries on whether existing ETFs will be forced to liquidate portfolios to shift to new indices, the brokerage explained: Existing ETFs investing in Vietnam primarily track Vietnam-specific standalone indices (such as the FTSE Vietnam Index and VN30) rather than regional or global indices.

Since Vietnam's inclusion in FTSE GEIS does not alter these standalone indices, existing ETFs are not compelled to liquidate their holdings.

Meanwhile, new passive investment demand will come from emerging market and global funds (e.g., Vanguard FTSE Emerging Markets) as these funds begin adding Vietnamese stocks to their portfolios.

"Overall, the net impact from passive ETF funds will be additional net buying rather than a mandatory portfolio rebalancing.

In addition to the estimated $1.5 billion in passive capital inflows, active funds may also deploy capital early into large-cap stocks to prepare for index benchmarking following Vietnam's upgrade.

Some independent estimates suggest total inflows (passive active) could reach approximately $3–6 billion within 12–18 months post-upgrade.

Among these, HSBC estimates total inflows into Vietnam at around $3.4 billion, including roughly $1.5 billion in passive flows.

Early active inflows, combined with market re-rating effects, could help reverse the net selling trend observed among foreign investors in recent years. However, the scale and timing of disbursements will remain dependent on valuation levels, exchange rate developments, and risk appetite toward emerging markets," Vietcap assessed.

Furthermore, as noted by various international financial institutions, Vietnam's ambition extends beyond an upgrade under FTSE Russell standards. Maintaining its status after the effective date means continuously refining and elevating market quality—steps that also serve ongoing efforts toward an MSCI upgrade.

"The upgrade by FTSE Russell is viewed as the initial step, with the next target being MSCI—an index provider referenced by a significantly larger pool of assets under management. During its June 2026 review, MSCI had not yet added Vietnam to its upgrade watchlist," Vietcap's research team informed.

Vietnam currently satisfies roughly 10 out of 18 market accessibility criteria according to MSCI's assessment.

Remaining bottlenecks include: Foreign Ownership Limits (FOL); pre-funding and clearing mechanisms; and the foreign exchange market, where Vietnam lacks an offshore currency market and onshore transactions remain tied to underlying securities transactions.

"Continuing to resolve these issues will dictate the roadmap for an MSCI upgrade while laying the foundation for sustained long-term international capital inflows," according to Vietcap Securities.