Vietnam waits for major upgrade to its $200 billion stock market

Vietnam's long wait for emerging market status could soon be over.

The Southeast Asian nation is currently classified as a frontier market and has been on the FTSE emerging market watchlist since 2018. Global index provider FTSE Russell confirmed earlier this month that it has retained the country on its watchlist.

The agency highlighted the Vietnamese government's support for market reforms and recommended more meetings between both local authorities and foreign investors. An upgrade to emerging market status could see global funds pouring billions into Vietnam's financial market which currently has a market value just north of $200 billion.

Speaking to CNBC's "Street Signs Asia" before the confirmation, Maybank Investment Bank Vietnam's Head of Equity Research Thanh Quan Trong said that the FTSE upgrade for Vietnam to emerging market status could come as early as September 2025.

That's a similar target also set by Vietnam's Prime Minister Pham Minh Chinh's earlier this year, with FTSE Russell recommending the country sticks to its current pace of reforms if it is to meet that deadline.

"We are seeing good progress in Vietnam fixing the regulatory bottlenecks to get the market upgraded to emerging market status," Trong told CNBC.

The Vietnamese government is "putting focus on the economy again," which he says brings "upsides" through projections of at least 6.2% GDP growth next year. Indeed, the World Bank projects GDP to grow 6.5% in 2025 "driven by increasing global demand and restored domestic consumer confidence."

According to Vietnam's Institute for Economic and Research Policy, GDP growth in the fourth quarter of 2024 is expected to hit 7.4%, reaching the 7% target set by the government.

Trong is not alone in painting a