POW faces risk of being kicked out of VN30-Index

June, 02/2021 - 07:47
PetroVietnam Power Corporation (POW)'s market capitalisation has fallen significantly for more than a year, meaning its shares might be eliminated from the VN30-Index during assessments. 
Cà Mau Thermal Power Plant of PetroVietnam Power in U Minh District, Cà Mau Province. Photo pvpower.vn

HÀ NỘI — PetroVietnam Power Corporation (POW)'s market capitalisation has fallen significantly for more than a year, meaning its shares might be eliminated from the VN30-Index during assessments. 

On Tuesday, POW shares were traded at VNĐ12,100 per share, making VNĐ27.4 trillion (US$1.2 billion) in market capitalisation.

With the value, PetroVietnam Power is standing in 36th in the top listed companies on the Hồ Chí Minh Stock Exchange (HoSE) with the greatest market capitalisation. The rank was down sharply since January 2020 when it was in the top 20 companies by market capitalisation and listed in the VN30-Index, which tracks the 30 biggest stocks on HoSE. 

The downgrade in POW's rank was not due to the decrease of its stock price as the price is similar to late 2019.

The reasons were that the market has recorded the appearance of the series of companies with high market capitalisation and many shares have surged tens to hundreds of per cent since early 2020.

Some companies that were listed after PetroVietnam Power, like Vietnam Rubber Group JSC (GVR), is worth VNĐ113.4 trillion (US$4.9 billion), standing in the top 13 companies by market capitalisation. 

Especially, a series of banks that were newly listed or transferred from other exchanges like Vietnam International Commercial Joint Stock Bank (VIB), Asia Commercial Bank (ACB) and SEABank (SSB) all surpassed PetroVietnam Power in market capitalisation. 

With the current rank, PetroVietnam Power's position will be threatened during the portfolio assessment of the VN30-Index this July.

According to regulation version 3.0 issued on November 9, 2020, the assessment is based on criteria including listing date, liquidity, and stocks rank from 21 to 40 by market capitalisation in the last 12 months. Also those in the VN30 basket in the previous assessment will get priority, then come newly listed stocks.

However, with the downgrade to the bottom rank in the priority group, if POW share prices don't improve soon, there is a risk of being kicked out of the VN30-Index. 

The VN30-Index is an important index that attracts many passive funds as the country's stock market rises dramatically.  VNS

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