HoSE introduces VNSHINE Index framework to enhance shareholder value

HoSE introduces VNSHINE Index framework to enhance shareholder value

This initiative aims to spotlight companies focused on delivering shareholder value through consistent dividend payments and robust financial performance.

The bull and bear statues outside the headquarters of HoSE in HCM City. — Photo HoSE

The Hochiminh Stock Exchange (HoSE) has officially announced the establishment of the Vietnam Shareholder Interest Enhanced Index (VNSHINE), implementing a comprehensive framework for the selection and management of this new investment index.

This initiative aims to spotlight companies focused on delivering shareholder value through consistent dividend payments and robust financial performance.

According to Decision No. 1105/QĐ-SGDHCM, the VNSHINE-Index will comprise a minimum of 15 and a maximum of 30 stocks chosen from the VNAllShare pool, subject to stringent selection criteria.

To qualify for inclusion in the index, companies must have consistently paid cash dividends for three consecutive years prior to the assessment year.

Additionally, the companies must be listed for at least three years and achieve an average trading volume of VNĐ10 billion (US$379,103) per day.

Following the preliminary screening, eligible stocks will be evaluated based on a shareholder yield score, which incorporates three key components: cash dividend yield, changes in net debt and the level of share dilution.

Each factor will be scored on a scale of 100, with varying weights assigned according to the industry sector.

Stocks with higher shareholder yield scores will be prioritised for inclusion in the index, aligning with the calculation methodologies outlined by HoSE.

To ensure stability and continuity in the index, the exchange will conduct ongoing monitoring from the date of data closure until the effective date of the new portfolio, removing any stocks that fall under warning, suspension or delisting categories.

The framework also specifies mechanisms for replacing stocks during the index period.

The VNSHINE-Index will utilise a free-float adjusted market capitalisation model, imposing a weight limit on individual stocks.

The price index will be updated every five seconds throughout trading hours, commencing from a base value of 1,000 points.

The component stock list will undergo an annual review in April, while updates regarding free-float ratios and volume circulation will occur quarterly in January, April, July and October.

This announcement follows HoSE's earlier launch of the VNDIVIDEND-Index in October, which tracks stocks known for their dividend policies.

The introduction of the VNSHINE index provides investors with a valuable reference tool for identifying companies that maintain stable dividend policies and strong cash flows, thereby emphasising shareholder interests. 

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