Investment firm HoSE introduces two fresh indices for portfolio diversification
The Ho Chi Minh Stock Exchange (HoSE) has expanded its offerings with the launch of two new investment indices: the VN50 Growth Index and the VNMITECH Index. These indices aim to reflect the dynamic growth of specific sectors in the Ho Chi Minh Stock Market.
VN50 Growth Index
The VN50 Growth Index includes 50 selected stocks from the VNAllshare Index. To qualify, stocks must have a minimum free-float market capitalization of VND 2 trillion (approximately US$76–79 million) and a daily trading volume of at least VND 20 billion. The top 50 stocks with the highest free-float market capitalization are included, prioritizing those with higher trading volumes when capitalizations are equal. The index also imposes a sector-wide cap of 40 per cent for stocks within the same industry.
VNMITECH Index
The VNMITECH Index, on the other hand, focuses on modern industrial and technology sectors. It comprises between 30 and 50 stocks, selected from the VNAllshare Materials, Industrials, and Information Technology indices. To qualify, stocks must have a minimum free-float market capitalization of VND 1.5 trillion (about US$59 million) and a daily trading volume of at least VND 20 billion. The index imposes limits on the capitalization weight of individual stocks, capping it at 10 per cent, but specific weight limits for the VNMITECH Index are not explicitly detailed.
Periodic Reviews and Updates
Both the VN50 Growth Index and the VNMITECH Index will be periodically reviewed, with evaluations taking place at the end of June and December each year. Quarterly updates for both indices will help adjust for changes in free-float ratios, circulation volumes, and other relevant metrics.
Maintaining Integrity
Stocks that come under a warning status, transaction restriction, or temporary suspension will be removed from the indices to maintain their integrity.
Enhancing Investment Opportunities
The VN50 Growth Index is designed to enhance investment opportunities in the Ho Chi Minh Stock Market, while the VNMITECH Index focuses on modern industrial and technology stocks. Both indices aim to provide benchmarks for investment products and highlight growth companies in Vietnam’s stock market.
In summary, the VN50 Growth Index and the VNMITECH Index offer investors a unique opportunity to invest in the dynamic and growing sectors of the Ho Chi Minh Stock Market. With their periodic reviews, updates, and stringent qualification criteria, these indices promise to maintain their relevance to market conditions and continue to provide valuable insights for investors.
[1] [Source] [2] [Source] [3] [Source]
Note: The locations of the stock exchange is Hà Nội, not mentioned in the provided information.
- The VN50 Growth Index includes stocks from sectors like finance, business, and technology, with a focus on growth companies.
- To qualify for inclusion in the VNMITECH Index, stocks must come from the materials, industrials, or information technology sectors.
- Investors can expect periodic reviews and updates for both indices, ensuring they remain relevant to market conditions.
- The Ho Chi Minh Stock Exchange's new indices, VN50 Growth and VNMITECH, aim to maintain their integrity by removing any stocks under a warning status, transaction restriction, or temporary suspension.
