Vietnam’s stock market is about to witness an interesting development with the upcoming rebalancing of foreign ETFs. On September 6th, FTSE Russell will announce the constituent stocks of the FTSE Vietnam All-share and FTSE Vietnam Index.
A week later, in the early hours of September 13th, MarketVector will also reveal the stocks included in the MarketVector Vietnam Local Index.
By September 20th, these ETFs will have completed the rebalancing of their portfolios. Currently, the FTSE Vietnam Swap UCITS ETF, which tracks the FTSE Vietnam Index, has approximately VND 7.4 trillion in assets, while the V.N.M ETF, which follows the MarketVector Vietnam Local Index, boasts a larger size of VND 12.5 trillion. SSI Securities Corporation has recently released its projections for the ETFs’ portfolio rebalancing.
Regarding the FTSE Vietnam Index: SSI Research anticipates the addition of three stocks to the index: KDH, FRT, and FTS. KDH has met the final criterion of foreign room availability, with its foreign room increasing to 11.9%. FRT and FTS, on the other hand, now satisfy the liquidity criterion.
Conversely, EVF may be removed from the index as it fails to meet the requirements for free-float ratio and free-float market capitalization.
Based on this scenario, SSI Research estimates that the FTSE Vietnam Swap UCITS ETF will purchase approximately 5.1 million KDH shares, 805,000 FRT shares, and 2 million FTS shares to include in its portfolio.
However, the fund is expected to sell about 4.29 million EVF shares, while VIX and VND are the two stocks that will likely see a reduction in their weight, with potential sell-offs of 8.9 million and 4.2 million shares, respectively.
Turning to the MarketVector Vietnam Local Index: SSI Research does not foresee any new additions to this index. On the other hand, EVF is unlikely to be removed despite failing to meet the free-float market capitalization criterion.
Assuming these changes, the index will comprise 45 stocks. SSI estimates that the VanEck Vectors Vietnam ETF will sell approximately 8.3 EVF shares.
Some stocks that are expected to be offloaded include VIX (-2.5 million shares), VIC (-3 million shares), VHM (-2.3 million shares), and HUTT (-1.6 million shares).
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On September 20, the above-mentioned ETFs will undergo a complete portfolio restructuring.
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