Restructuring period of 2 foreign ETFs: KDH may miss the opportunity to enter the FTSE basket due to foreign "room"
With a maximum foreign ownership ratio of 50%, the foreign room gap of KDH shares is only about 10.12%, quite close to the minimum threshold of FTSE Vietnam of 10%. This may prevent KDH from entering this group of portfolios.
The two foreign ETFs will restructure their portfolios for the second quarter of 2024 in June. Specifically, based on data from May 31, FTSE will announce the portfolio for the FTSE Vietnam Index basket on June 7. A week later, MVIS will announce the portfolio structure for the MarketVector Vietnam Local Index on June 14. The two ETFs based on the FTSE and MVIS index groups will need to complete their portfolio structure before June 21.
Forecasting changes to the ETF portfolio in the second quarter of 2024 based on data updated to the end of last week, analysts from SSI Securities predict that the MarketVector Vietnam Local Index will not exclude any stocks. At the same time, EVF and CTR may be added because they are in the top 85% of accumulated free-float capitalization among eligible stocks.
Assuming the above changes, the index portfolio will include 46 stocks. The total asset value of the VanEck Vectors Vietnam ETF as of May 24 reached VND13,440 billion. In this evaluation period, SSI Research estimates that the VanEck Vectors Vietnam ETF will buy about 8.9 million EVF shares and 1 million CTR shares.
According to the forecast of this securities company, some other stocks will also be bought more due to increased proportion such as VHM (+4.8 million shares), SBT (+1.53 million shares), HAG (+1.16 million shares),... On the contrary, VanEck Vectors Vietnam ETF may also sell some stocks to reduce proportion, focusing on HUT (-2.7 million shares), HPG (-1.58 million shares), VIX (-1.23 million shares)...
For the FTSE Vietnam Index, KDH and TCH can be added as they satisfy all the conditions. At the same time, no stocks will be removed from this basket.
However, the inclusion of KDH shares in the FTSE Vietnam Index may face obstacles. According to analysts from SSI, the ownership ratio of KDH shares that foreign investors are allowed to buy as of May 24, 2024 is 10.12%. Meanwhile, the minimum threshold of FTSE Vietnam is 10%. The "fragile" gap may cause KDH to miss the opportunity to be included in this foreign fund portfolio.
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| Forecast of the portfolio structure period of the FTSE Vietnam Index - Source: SSI Research |
In the first scenario, when both KDH and TCH can be added to the FTSE Vietnam Index, SSI Research estimates that the FTSE Vietnam Swap UCITS ETF will buy about 5.2 million KDH shares and 4.5 million TCH shares. The proportion of KDH shares in the total portfolio is estimated to reach 2.19%, while TCH is 0.99%.
In the second case - only TCH is added to the portfolio, SSI Research estimates that the FTSE Vietnam Swap UCITS ETF will buy about 4.6 million TCH shares, equivalent to a proportion of 1.01%.
In both cases above, some stocks are expected to be sold off quite strongly due to the reduction in the portfolio weight, including VND and NVL.
Source: https://baodautu.vn/ky-co-cau-2-etf-ngoai-kdh-co-the-lo-co-hoi-vao-ro-ftse-vi-room-ngoai-d216224.html
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