Flash Report /
Vietnam

Vietnam: Potential stocks in new indices

    Rong Viet
    10 September 2019
    Published by

    The Ho Chi Minh Stock Exchange (HOSE) announced the creation of three new indices namely, Vietnam Diamond Index, Vietnam Financial Select Index, and Vietnam Leading Financial Index. We expect HOSE to release the constituents of the indices in late October, helping local investment management companies to create ETFs. Just recently, SSI investment management company said that they will release an ETF to track either financial indices.

    Based on HOSE methodology, we estimate the constituents and weights of potential stocks in the tables below.

    The Vietnam Diamond Index will include stocks that have limited foreign room and a reasonable PE ratio, and at least VND2,000bn (US$86mn) in market capitalisation. Meanwhile, all constituents of both the Vietnam Financial Select Index and the Vietnam Leading Financial Index have to be in the VNFinancial Index. The Vietnam Financial Select Index will only include financial stocks that have a minimum market capitalisation of VND500bn (US$21.55mn) and at least VND1bn (US$0.04mn) in daily trading value (the sum of put-through and order-matching value). The Vietnam Leading Financial Index requires financial stocks to have a minimum of VND10bn (US$0.43mn) in daily trading value and at least 0.1% turnover.

    Table 1: Basic characteristics of new indices 

    Vietnam Diamond IndexVietnam Financial Select Sector IndexVietnam Leading Financial Index
    Number of constituents10-20 stocksAt least 10 stocksAt least 10 stocks
    Maximum weights15% for individual stocks and 40% for each industry15% for individual stocks15% for individual stocks
    ReviewAdd/delete constituents will be published on the third Monday of April and October. Number of outstanding shares, free-float will be updated on the third Monday of January, April, July, and October.Add/delete constituents will be published on the third Monday of April and October. Number of outstanding shares, free-float will be updated on the third Monday of January, April, July, and October.Add/delete constituents will be published on the third Monday of January and July. Number of outstanding shares, free-float will be updated on the third Monday of January, April, July, and October.
    ChangesAny changes will be made on the first Monday of February, May, August and NovemberAny changes will be made on the first Monday of February, May, August and NovemberAny changes will be made on the first Monday of February, May, August and November
    Source: HSX, Rong Viet Securities


    Table 2: Vietnam Diamond Index forecast 
    TickerIndustryFree floatWeight
    TCBBanks65%15.00%
    VPBBanks70%11.00%
    MBBBanks60%8.60%
    TPBBanks60%3.40%
    CTGBanks8%2.00%
    MWGConsumer Discretionary65%15.00%
    PNJConsumer Discretionary80%9.20%
    GMDIndustrials90%5.00%
    REEIndustrials55%3.90%
    FPTInformation Technology80%15.00%
    KDHReal Estate60%5.30%
    DXGReal Estate75%4.10%
    NLGReal Estate55%2.50%
    Source: HSX, Bloomberg, Fiinpro, Rong Viet Securities


    Table 3: Vietnam Financial Select Sector Index forecast
    TickerFree floatWeight
    TCB65%15.00%
    VPB70%15.00%
    MBB60%12.70%
    HDB70%9.40%
    STB95%9.40%
    VCB8%8.60%
    EIB85%7.80%
    TPB60%5.00%
    SSI60%3.70%
    CTG8%3.00%
    BVH10%2.90%
    BID5%2.60%
    VCI65%2.00%
    HCM40%1.40%
    VND65%1.10%
    BMI30%0.30%
    Source: HSX, Bloomberg, Fiinpro, Rong Viet Securities


    Table 4: Vietnam Leading Financial Index forecast
    TickerFree floatWeight
    TCB65.00%15.00%
    VPB70.00%15.00%
    MBB60.00%13.10%
    HDB70.00%9.80%
    STB95.00%9.70%
    VCB8.00%8.90%
    EIB85.00%8.00%
    TPB60.00%5.20%
    SSI60.00%3.90%
    CTG8.00%3.10%
    BVH10.00%3.00%
    BID5.00%2.70%
    HCM40.00%1.40%
    VND65.00%1.10%
    Source: HSX, Bloomberg, Fiinpro, Rong Viet Securities