HoSE introduces index for dividend growth stocks

HoSE introduces index for dividend growth stocks

The VNDIVIDEND index will consist of a minimum of 10 and a maximum of 20 stocks selected from the VNAllshare index, following specific screening criteria.

A smartphone showing stocks' movement. — VNA/VNS Photo

The Ho Chi Minh City Stock Exchange (HOSE) has launched the Vietnam Dividend Growth Index (VNDIVIDEND), marking the first time the Vietnamese stock market has established an index specifically for dividend-paying growth stocks. 

This initiative aims to enhance transparency and provide investors with a focused investment strategy centred around companies that consistently pay dividends.

The VNDIVIDEND index will consist of a minimum of 10 and a maximum of 20 stocks selected from the VNAllshare index, following specific screening criteria.

The index will be calculated based on market capitalisation, adjusted for free-float shares, and will implement limits on the weighting of individual stocks and sectors to prevent excessive concentration.

To qualify for inclusion, stocks must be listed on HoSE for at least five years prior to the assessment year, possess a minimum market capitalisation of VNĐ2 trillion (US$76 million) and meet certain trading volume requirements. Additionally, stocks must demonstrate positive net income over the last four quarters. 

After these initial criteria are met, further evaluation will ensure that only companies with a history of consistent cash dividend payments are included.

The introduction of the VNDIVIDEND index is pivotal for both retail and institutional investors, as it provides a reliable benchmark for tracking performance in the dividend segment. This move aligns with the growing trend of investment vehicles focusing on high-dividend stocks. 

Notably, the DC Blue-chips Fund (DCBC) from Dragon Capital recently transitioned to the 'DC Dividend Focus Equity Fund' (DCDE), reflecting an increasing appetite for dividend growth investments.

Overall, the VNDIVIDEND index represents a strategic step in the evolution of Việt Nam's stock market. It not only enhances accessibility to dividend-paying stocks but also encourages companies to adopt sustainable dividend policies. 

This initiative benefits shareholders and the broader financial ecosystem.

Previously, on August 11, HoSE announced the regulations for the construction and management of the Modern Industrial and Technology Stocks Index (VNMITECH) and the Vietnam Growth 50 Index (VN50 Growth). 

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