SINGAPORE/HANOI — Vietnam is on the cusp of joining the emerging-markets club and stocks have notched their biggest rally in years, but foreigners have been sellers and say investing is handicapped by tariff risks, ownership limits and one firm’s dominance of the index.

That could hold back global capital from Southeast Asia’s fastest-growing economy at a time when money is flowing to smaller markets, even after a likely bump from FTSE Russell’s upgrade of Vietnam’s market from frontier into secondary emerging status, expected to be effective from September.

A confirmation of the upgrade could come in March or April, when FTSE publishes its review of Vietnam’s regulatory progress.

Another potential boost may follow if index provider MSCI adds Vietnam to its watchlist — a step J.P. Morgan says could happen as early as June — although an actual upgrade is not expected before the end of the decade.

Vietnam’s benchmark index  gained 41% in 2025, its strongest rise in eight years, as the export-reliant nation expanded 8%.

Flows of overseas capital can lift Vietnamese companies’ stocks and lower their funding costs, supporting economic growth and the currency.”

But foreign investors are leaning toward other markets, worried that Vietnam’s growth, in part due to trade re-routed from China, is at risk from fickle US trade policy and of the contribution that developer-to-carmarker conglomerate Vingroup has made to the market gains.

“Foreign investors were cautious on Vietnam heading into the Trump presidency due to concerns around potential tariffs,” said Sean Taylor, chief investment officer at San Francisco-based asset management firm Matthews Asia.

“We felt there were many opportunities to make money in more liquid and transparent markets in the index like Taiwan, South Korea, and China.”

Net equity outflows hit a record $5.1 billion in 2025, according to LSEG data, and extended in January and February to leave foreigners holding roughly 14.5% of the shares on issue in a market worth $332 billion, government figures show.

London-listed Vietnam Enterprise Investments Limited, Dragon Capital’s flagship closed-end fund, also had a rush for the exits, with more than two-thirds of shareholders voting to participate in a tender offer to cash out some of their holdings.

The fund, which counts the Gates Foundation Trust and hedge fund manager Boaz Weinstein among investors, has long traded at a discount to the value of its assets – a symptom of the illiquidity of the local market.

Vietnam’s market regulator told Reuters in a statement that “several of the world’s largest global investment institutions … have actively prepared to invest in Vietnam,” but did not name anyone in particular.

OUTSIZED INFLUENCE
Foreign exchange, access and ownership caps have also long tempered overseas interest in Vietnamese stocks, but last year’s rally has also bent a lopsided market further out of shape.

A benchmark dominated by banks and developers is being increasingly driven by a single stock, Vingroup, which rose 736% last year. It is Vietnam’s most valuable company and together with subsidiaries comprises more than 20% of the benchmark.

“For foreign funds that care about diversification and liquidity, that makes it harder to add exposure without taking on too much single-stock risk,” said Tran Thi Mong Tuyen, a researcher at the Hawaii-based Pacific Forum.

Owned by Pham Nhat Vuong, a businessman who made his first fortune selling instant noodles in Ukraine, Vingroup was founded in 1993 and has expanded from real estate into a conglomerate spanning railways, steel, energy, entertainment, and space.

Now it’s almost a $50 billion behemoth despite a recent slide. Vingroup’s stock last year drove up the broader market amid government support and a pledge from the ruling Communist Party for “preferential policies” for private domestic firms.

“A few related stocks account for a disproportionate share of the index and exert outsized influence over market movements,” said Thu Nguyen, deputy head of Vietnamese fund VinaCapital.

Vingroup, which floated loss-making electric vehicle maker VinFast on the Nasdaq in 2023, said last year’s stock price gains reflected supportive government policies and its units’ achievements.

Its net profit doubled last year, however the stratospheric stock price move means it currently trades at a lofty price-to-earnings multiple of 96.

That valuation “is quite challenging for a fundamental investor like ourselves to get comfortable with at the present moment, when there remain significant uncertainties about the timing of the future cash flows from the many projects it is involved with,” said Craig Martin, Singapore-based chairman of Dynam Capital, which manages a London-listed Vietnam fund.

Eight brokers and other fund managers contacted by Reuters either said they did not advise clients to buy Vingroup stock or declined to talk about the company, with some citing fears of reprisals.

To be sure, Vietnam has loosened funding and trading rules, making access easier and making progress toward a market upgrade.

Global investors aren’t wholesale bearish about Vietnam either, with some buying companies listed elsewhere, but doing business in Vietnam, in order to gain exposure.

But with prices for locally-listed firms sometimes at 20-30% premiums for international buyers, due to caps on foreign holdings, few see the value in rushing in just yet.

“A lot of managers have mentioned stocks have potential, but the liquidity needs to be there,” said Hunter Beaudoin from research firm Morningstar. “Foreign ownership limits are creating some constraints.” — Reuters

KUALA LUMPUR — Malaysia’s prime minister said a suspect in an alleged plot to topple the government had engaged an international public relations firm to launch a coordinated attack aimed at undermining national institutions before the next election.

Police said last week they were investigating an alleged conspiracy to “sabotage national stability”, under laws against undermining parliamentary democracy.

In an address to parliament on Tuesday, Prime Minister Anwar Ibrahim provided further details of the alleged plot, saying the suspect had engaged the PR firm as part of a response to being the subject of a large-scale graft investigation by the Malaysian Anti-Corruption Commission (MACC).

Neither Mr. Anwar, nor the police, have identified the individual suspect or the PR firm.

Mr. Anwar said the PR strategy, which began in August 2024 and included engaging media agencies, banks, and lawmakers, was to run until the next general election, due by early 2028.

“Their strategy… was to contact all foreign media with a strategy of undermining the government’s efforts, especially the MACC’s,” Mr. Anwar told parliament, citing documents obtained by authorities.

“And then to use their power and contacts in foreign countries to shape a narrative questioning the authority of the Malaysian government and organize a movement through the Malaysian parliament. That is what worries us.”

Mr. Anwar said documents identified media firm Bloomberg as one of the agencies targeted by the alleged conspiracy.

A Bloomberg spokesperson did not immediately respond to an emailed request for comment on Mr. Anwar’s remarks.

A special government committee is conducting a separate investigation into allegations in a Bloomberg report last month that head of MACC, Azam Baki, may have breached shareholding laws.

Mr. Azam has said he is willing to be investigated as he had “nothing to hide” and all his financial declarations have been made according to public service laws.

Lawmakers, including a key party in Mr. Anwar’s ruling coalition, have called for a royal inquiry into another Bloomberg article alleging broader misconduct at the anti-graft agency.

The MACC has said the allegations were “baseless”, and that they were an attempt to discredit its investigations and enforcement actions within the corporate sector.

On Tuesday, Mr. Anwar said a royal inquiry into the matter was “premature” as the special committee was expected to complete its probe this week. — Reuters

GENEVA — Progress on a potential international framework to prohibit and restrict Lethal Autonomous Weapons Systems (LAWS) is urgently needed, as talks on the matter in Geneva enter a crucial phase, their chair said.

From this week to the mandate’s end in September, 128 states will discuss whether to agree by consensus a non-binding text that could pave the way for future negotiations on prohibitions and regulations on LAWS.

Since 2014, more than a hundred states party to the Convention on Certain Conventional Weapons have met in the Swiss city to discuss banning LAWS that do not comply with existing international law while regulating others.

“If we wait then it almost gets to a stage where you’re too late… We will be overtaken by technological developments,” Robert in den Bosch, the Dutch Disarmament Ambassador in Geneva and Chair of the CCW Group of Governmental Experts on LAWS, told Reuters.

There are mounting concerns over the role of AI-assisted semi-autonomous weapons that have been used in conflicts in Ukraine, Sudan, Gaza, and in Iran and the Gulf.

While states agree international humanitarian law (IHL) applies to LAWS, specific internationally binding standards for these systems remain virtually non-existent.

Russia and the United States, among others, oppose new legally binding instruments, arguing existing laws suffice.

Mr. In den Bosch stated that others say new rules are needed to bridge supposed accountability gaps in IHL, which place obligations on states and individuals, not on machines.

The Rolling Text under discussion in Geneva proposes “context appropriate human judgment and control” as a measure to ensure that systems that “identify, select and engage” targets without human intervention comply with IHL.

Despite growing calls for urgent regulation, UN Secretary-General Antonio Guterres’ deadline for agreeing a legally binding instrument on LAWS this year will realistically be missed, Mr. In den Bosch said.

While the deadline is outside the Geneva talks’ remit, the challenge of securing consensus on even non-binding elements underscores the difficulty of making progress, Mr. In den Bosch stated.

The talks are set within a challenging context of geopolitical tensions and recent European withdrawals from the landmine ban treaty over Russian threats.

The Review Conference of the CCW in November could decide to launch negotiations for a binding protocol after the Geneva talks end. However, in the absence of agreement, there is a risk some countries might pursue a breakaway treaty elsewhere, Mr. In den Bosch stated. — Reuters

WASHINGTON — Israeli Prime Minister Benjamin Netanyahu said on Monday that the US and Israel’s war against Iran may take “some time” but it will not take years.

The US and Israeli air war ⁠against ​Iran began with attacks against Tehran on Saturday, killing Iranian Supreme Leader Ali Khamenei, and prompting Iranian retaliation against Israel and missile attacks at Arab nations with US bases across the Middle East.

President Donald Trump initially projected the war to last four to five weeks, but added it could go on longer, and has since sought to justify a broad, open-ended war on Iran.

Mr. Netanyahu rejected the idea of the conflict lasting years, like previous wars in the region.

“I said it could be quick and decisive. It may take some time, but it’s not going to take years. It’s not an endless war,” Mr. Netanyahu said on Fox News’ “Hannity” program.

The assault on Iran formed part of a list of Mr. Trump’s foreign policy actions that have marked a striking shift from his “America First” rhetoric against US interventions when he campaigned in the 2024 elections.

Mr. Netanyahu said he saw the war as an opportunity for lasting peace in the Middle East, including between Israel and Saudi Arabia.

“Yes I do,” he said, when asked if he saw a lasting path to peace in the region.

A Reuters/Ipsos poll showed over the weekend that only one in four Americans approved of ​US strikes on Iran that have plunged the Middle East into chaos.

US wars in Iraq and Afghanistan that lasted several years made many Americans skeptical of Washington’s direct involvement in wars on foreign soil.

Mr. Netanyahu said the US and Israel’s war against Iran was creating a scenario for the Iranian people to topple their government.

“Now, of course, it’s up to the people of Iran in the final count to change the government, but we are creating – America and Israel together are creating – the conditions for them to do so,” he said.

Mr. Trump’s stated aims and timeline for the war have shifted since it began over the weekend. On Saturday when he announced the strikes, he urged Iranians to “take back your country” and implied a goal of toppling the government.

In comments on Monday, Mr. Trump made no mention of toppling Iran’s government and said the war was needed to prevent Iran from developing a nuclear weapon, which Tehran denies seeking, and to thwart its long-range ballistic missile program.

Israel is widely believed to be the only Middle Eastern country with nuclear weapons. Washington also has nuclear weapons. — Reuters

DUBAI/WASHINGTON — The US and Israeli air war against Iran widened on Monday, with no end in sight as Israel attacked Lebanon in response to strikes by Hezbollah and Iran kept up its attacks on Gulf states that host US military bases.

US President Donald Trump said the operation could continue for weeks and that it was unclear who was in charge in Iran after the targeted killing of Supreme Leader Ayatollah Ali Khamenei in the opening hours of the US-Israel campaign over the weekend.

The attack on Iran has pitched the Gulf into war, killed scores of civilians in Iran, Israel and Lebanon, thrown global air transport into chaos and shut down shipping through the Strait of Hormuz, where one-fifth of the world’s oil trade skirts the Iranian coast, sending oil prices surging.

Underlining the risks, Kuwait mistakenly shot down three American F-15E fighter jets during an Iranian attack, US Central Command said. All six crew members ejected and were safely recovered.

The US military said it had struck more than 1,250 targets in Iran and destroyed 11 Iranian ships. Six US service personnel have been killed so far, all in Iran’s retaliatory attacks over the weekend on Kuwait.

As night fell on Monday, Israel warned of imminent attacks on towns in Lebanon and said it had attacked the complex that houses Iran’s state broadcaster IRIB in Tehran. Explosions shook buildings across Tel Aviv as air defenses intercepted incoming Iranian missiles.

Early on Tuesday, two drones struck the US embassy in Riyadh, causing minor damage and starting a fire, Saudi Arabia’s Defense Ministry said.

For Mr. Trump, joining Israel to attack Iran amounts to the biggest US foreign policy gamble in decades and a major political risk for his Republican Party in this year’s midterm elections. Only one in four Americans support the Iran campaign, according to a weekend Reuters/Ipsos poll.

Average US retail gasoline prices rose above $3 per gallon, in part due to the conflict, as Mr. Trump faces growing discontent over bread-and-butter issues.

WAR WIDENS TO LEBANON
Mr. Trump has said the US faced an imminent threat from Iran that justified war, although he gave no specifics and some US lawmakers said he has shown no evidence to back that assessment.

Before briefing lawmakers, Secretary of State Marco Rubio told reporters on Monday the US acted preemptively because it knew of its close ally Israel’s determination and plans to strike Iran.

“We knew that that would precipitate an attack against American forces, and we knew that if we didn’t preemptively go after them before they launched those attacks, we would suffer higher casualties,” Mr. Rubio said.

In his most extensive public comments so far on the conflict, Mr. Trump on Monday said he had ordered the attack to thwart Tehran’s nuclear program and a ballistic missile program that he said was growing rapidly.

Mr. Trump gave no sign that the operation would end soon, and military officials said more US forces were being sent to the region.

“Right from the beginning, we projected four to five weeks, but we have capability to go far longer than that,” Mr. Trump said at the White House.

A new front in the war opened on Monday when the Lebanese Hezbollah militia, one of Tehran’s principal allies in the Middle East, launched missiles and drones towards Israel.

Israel responded with sweeping airstrikes on the Hezbollah-controlled southern suburbs of Beirut. The Lebanese state news agency NNA said at least 31 people had been killed and 149 injured.

STATE DEPARTMENT WARNING
The US State Department on Monday urged Americans to immediately leave more than a dozen countries in the region, including every Gulf and Levant state, although airspace closures have made doing so neither easy nor cheap.

Turkey joined Russia and China in condemning the war, which President Tayyip Erdogan called a “clear violation” of international law.

Iran denies seeking a nuclear weapon, and it said the US assault was unprovoked, occurring as Tehran negotiated a nuclear accord with Mr. Trump’s envoys. Mr. Trump withdrew from a prior international agreement curbing Iran’s nuclear program during his first term in 2018.

Ali Larijani, Iran’s top security official, said on social media that Iran would not negotiate with Mr. Trump, who had “delusional ambitions.”

Within Iran, where residents have jammed highways to flee the bombing, there was uncertainty about the future mixed with euphoria, apprehension, and rage.

Many have openly celebrated the death of Mr. Khamenei, 86, who ruled since 1989 and directed security forces that killed thousands of anti-government protesters early this year.

But the conservative clerical leaders have shown no sign of yielding power, and military experts say airstrikes without ground forces may not be enough to drive them out, a possibility Mr. Trump said he had not ruled out.

Meanwhile, scores of Iranians have been reported killed in strikes, including several that hit apparent civilian targets.

“They are killing children, they are attacking hospitals. Is this the kind of democracy Trump wants to bring us?” Morteza Sedighi, a 52-year-old teacher, said by phone from Tabriz in northwestern Iran. “Innocent people were first killed by the regime and now by Israel and the United States.”

As Washington’s allies in the Gulf came under renewed attack from Iranian missiles and drones, black smoke rose above the area around the US embassy in Kuwait. There were loud blasts in Dubai and Samha in the United Arab Emirates, and in the Qatari capital Doha.

Qatar, one of the world’s biggest exporters of liquefied natural gas, halted production, with no prospect of being able to ship safely through the chokepoint of the Strait of Hormuz.

Saudi Arabia shut its biggest refinery after drone strikes caused a fire there, one of a number of energy installations that became targets. — Reuters

OIL prices rose for a third day on Tuesday as the widening US-Israeli conflict with Iran and threats to shipping through the Strait of Hormuz heightened fears of supply disruptions from the key Middle East producing region.

Brent crude futures were at $78.83 a barrel, up $1.10, or 1.4%, by 0107 GMT. On Monday, the contract surged to as high as $82.37, its highest since January 2025, though it pared those gains to settle 6.7% higher.

US West Texas Intermediate crude  jumped 74 cents, or 1%, to $71.97 a barrel. In the previous session, the contract initially climbed to its highest since June 2025 before sliding back to still settle up 6.3%.

“With no quick de-escalation in sight, the Strait of Hormuz effectively closed and Iran showing a willingness to target energy infrastructure in the region, upside risks remain and they grow the longer the conflict drags on,” Tony Sycamore, IG market analyst, said in a note.

The US and Israeli air war against Iran widened on Monday with Israel attacking Lebanon and Iran responding with strikes against energy infrastructure in Gulf countries and against tankers in the Strait of Hormuz.

On a typical day, ships carrying crude oil equal to about one-fifth of global demand sail through the Strait of Hormuz along with tankers hauling diesel, gasoline and other fuels to major Asian markets including China and India. The waterway is also the conduit for about 20% of the world’s liquefied natural gas.

Tankers and container ships are avoiding the waterway as insurers have canceled their coverage for vessels.

The concerns about transiting the waterway are increasing as Iranian media reported on Monday an Iranian Revolutionary Guards senior official saying the Strait of Hormuz is closed and Iran will fire on any ship trying to pass.

Earlier on Monday, the Revolutionary Guards said a fuel tanker, identified as the Honduran-flagged Athe Nova, was burning in the Strait after being hit by two drones, Iranian news agencies reported.

Analysts expect oil prices to remain elevated over the coming days while markets focus on the impact of escalating Middle East conflict.

Bernstein on Monday raised its 2026 Brent oil price assumption from $65 to $80 a barrel, but sees prices reaching $120-$150 in an extreme case of prolonged conflict.

Refined product futures are also gaining as the Middle East is a key supplier of fuels and their processing facilities are at risk. On Monday, Saudi Arabia shut its biggest domestic oil refinery after a drone strike.

US ultra-low-sulfur diesel futures were up 3.1% at $2.991 after reaching a two-year high on Monday, while gasoline futures were up 1.1% after climbing 3.7% in the previous session.

European gasoil futures  gained 2.7% to $909.50 a metric ton, after climbing 18% on Monday. — Reuters