HoSE develops new indices for foreign-ownership-limited and financial firms

September 05, 2019 - 08:37


Outside the Hồ Chí Minh Stock Exchange (HoSE) in HCM City. - Photo baodautu.vn

HCM CITY – The Hồ Chí Minh Stock Exchange (HoSE) plans to introduce a new index that contains foreign-ownership-capped shares.

The Vietnam Diamond Index will contain 10-20 stocks that are picked from 239 being watched by the VNALLSHARE-Index on HoSE.

If the stock is not contained in the VNALLSHARE-Index, the company must have the foreign ownership limit of minimum 95 per cent and market value of at least VNĐ5 trillion (US$215 million).

Any company wishing to be included in the index must also have at least VNĐ15 billion worth of trading value each day and foreign investors are able to snap up maximum VNĐ500 billion worth of its remaining available shares.

The company shares must be traded constantly for at least 20 trading days on HoSE prior to the index review date.

The weight of each stock will account for maximum 15 per cent of the index and the weight of each stock group will account for maximum 40 per cent of the index.

The index will start trading at 1,000 points on an unknown date. The index data revision is made on the last day of March, June, September and December each year.

The index review is made public on the third Monday of April and October.

The information of the stocks in the index is updated on the third Monday of January, April, July and October.

Changes of the index revision take effect on the first Monday of February, May, August and November.

New financial indices

The southern bourse also wants to develop two new indices that watch the movement of financial stocks – the Vietnam Leading Financial Index (VNFIN-Lead Index) and the Vietnam Select Sector Index (VNFIN-Select Index).

VNFIN-Select Index will track financial stocks, containing at least 10 stocks whose weight is capped at 15 per cent of the index.

The company in the VNFIN-Select Index must have a market value of minimum VNĐ500 billion and its shares’ daily average trading value must be minimum VNĐ1 billion.

VNFIN-Lead Index will target stocks of financial firms that have no negative post-tax profit based on their nearest audited financial reports.

There will be at least 10 stocks in the index and an individual stock accounts for maximum 15 per cent of the index in market value.

Any company admitted to the VNFIN-Lead Index must have at least VNĐ10 billion worth of daily trading value and turnover ratio of minimum 0.1 per cent.

There are now four groups of indices on HoSE. The VNX indices watch the stocks listed on both HoSE and the Hà Nội Stock Exchange.

The HOSE indices watch company stocks listed on HoSE by market capitalisation.

The SECTOR indices watch HoSE-listed companies by industries and the TRI indices watch companies based on their total incomes. – VNS