HSX launches three new indices to boost market transparency and innovation

HSX launches three new indices to boost market transparency and innovation

The Ho Chi Minh Stock Exchange has introduced three new indices, marking a key step in market development and aligning with Vietnam's financial sector reform strategy.

The Ho Chi Minh Stock Exchange (HSX) will officially launch these fresh investment indices on November 3 as part of ongoing efforts to expand the range of investment products available on Vietnam's stock market.

This initiative is implemented under the framework of the 'Investor Restructuring and Fund Management Industry Development Scheme' pursuant to Decision No. 3168/QD-BTC issued by the Ministry of Finance on September 12.

Acting on directives from the State Securities Commission and with the approval of the Vietnam Stock Exchange (VNX), HSX has collaborated with several fund management companies to develop these three new indices, designed to meet the practical needs of the market.

Among them, the Vietnam Modern Industrials and Technology Index (VNMITECH) is designed to reflect the performance of companies operating in the industrial and technology sectors, two key pillarsin Vietnam's ongoing industrialisation and digital transformation journey.

The index portfolio consists of 30 to 50 stocks selected from the Materials (VNMAT), Industrials (VNIND), and Information Technology (VNIT) sectors.

The calculation methodology for the VNMITECH Index is based on free-float-adjusted market capitalisation, with a maximum weighting cap of 15 per cent per stock and 25 per cent for the materials sector.

This approach ensures a well-balanced portfolio and opens up investment opportunities in innovative enterprises capable of creating breakthrough value in the digital economy. At the same time, it helps channel capital towards sectors with strong long-term growth potential.

Alongside VNMITECH, the Vietnam Growth 50 Index (VN50 Growth) has been developed to track the performance of the 50 largest-cap stocks listed on HSX, showcasing the sustainable growth capabilities of leading companies.

This index is also calculated using a free-float-adjusted market capitalisation model, with a 10 per cent weighting cap per stock and a 40 per cent cap per sector.

What sets VN50 Growth apart is the inclusion of a growth adjustment factor based on the historical earnings per share (EPS) growth rate of each company.

This addition allows the index to better reflect the quality of real growth, giving higher weight to companies with significant business performances.

As a result, investors following a growth investing strategy can pursue it more effectively, selectively, and sustainably.

Meanwhile, the Vietnam Dividend Growth Index (VNDIVIDEND) is designed to measure the performance of companies with stable and steadily increasing cash dividend policies over consecutive years.

The index portfolio comprises between 10 and 20 stocks selected from the VNAllshare universe, all of which meet stringent criteria related to free-float-adjusted market capitalisation, liquidity, and positive after-tax profits over the most recent four quarters.

The VNAllshare universe includes all stocks that meet standards for liquidity and information transparency, ranging from large companies to small- and medium-sized enterprises. Thanks to its broad coverage, the index offers a comprehensive overview of Vietnam's stock market.

In addition, a stock is only eligible if it has a consistent history of cash dividend payments over the past three years and has achieved a minimum dividend growth rate of 80-100 per cent.

Like the others, this index also applies a free-float-adjusted market capitalisation model, with a 15 per cent cap per stock and 40 per cent cap per sector. The launch of VNDIVIDEND not only enables investors to monitor the performance of companies with solid financial foundations, but also supports value and income-focused investment strategies.

The introduction of these three new indices expands the index system of HSX and strengthens the alignment between indices, financial products, and investors.

This development is expected to foster a more diverse and transparent range of financial products in line with international practices, representing a strategic step forward in restructuring the investor base and advancing the growth of Vietnam's fund management industry, paving the way for future ETFs, index funds, and derivative investment instruments.

VIR