(Oct 19): Vietnam aims to introduce stock index options in the first quarter of next year as the country seeks to deepen its capital markets and attract more overseas investors following an upgrade to its equity market.

Testing of contracts tied to the VN30 Index is scheduled for November and December, Vu Thi Thuy Nga, general director of the Hanoi Stock Exchange, said in an interview. The gauge comprises the 30 largest stocks by market value on the Ho Chi Minh City Stock Exchange.

The new derivatives products are being introduced to lure more foreign capital into Vietnamese shares after FTSE Russell upgraded the country to secondary emerging-market status from frontier effective last month. The reclassification is expected to broaden Vietnam’s access to global emerging-market investment, even as the transition is phased in, with inclusion in FTSE’s emerging-market indexes expected through 2027.

The authorities expect the new options to help increase trading activity and improve liquidity, potentially supporting broader participation in the market, Hanoi Stock Exchange’s Nga said.

“This is a highly anticipated product, and it is hoped that it will help the market take off,” she said. “Now that we have been upgraded, we need products that align with those of more developed exchanges.”

Vietnam has undertaken a number of reforms in recent years to improve market accessibility.

Authorities have removed pre-funding requirements for equity trades, advanced plans for a centralised clearing system by 2027 and allowed foreign investors to trade via global brokerages, among other measures. The country is also weighing plans to allow trading during the midday break and widen daily price bands to improve liquidity.

The VN30 Index gained 5.9% in August amid optimism over the FTSE update before dropping 3.8% in September.

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