MWG shares return to VN Diamond index after half a year

After half a year of being removed from the VN Diamond index, MWG shares have returned to the VN Diamond index. Meanwhile, VRE shares have been put on the waiting list for removal.

The Ho Chi Minh City Stock Exchange (HoSE) has just announced the list of component stocks, index circulation volume, free-float ratio, capitalization ratio limit, FOL weight limit (foreign investor ownership ratio limit), weight limit for maintained stocks, stocks entering the index for the first time or stocks waiting to be eliminated and liquidity weight limit of the VN Diamond index effective from November 4, 2024.

Accordingly, MWG shares of Mobile World Investment Corporation (code MWG, HoSE) have been added back to the index basket. Meanwhile, VRE shares of Vincom Retail Corporation (code VRE, HoSE) have been put on the waiting list for removal. Currently, the total number of shares in the VN Diamond basket is 19.

Previously, MWG shares were removed from this index basket in the restructuring period in April 2024 due to not satisfying the P/E ratio requirements.

Recently, the Ho Chi Minh City Stock Exchange issued the Rules for Building and Managing the Vietnam Diamond Stock Index (VNDiamond Index) version 3.0 to improve the index. This version replaces the rules version 2.1 issued on September 30, 2022, which mainly updates the indicators related to liquidity conditions and conditions for selecting stocks into the basket.

Version 3.0 has added some new definitions of after-tax profit per share in the regulations on P/E ratio in Section 3.6.1. At the same time, some parameters and scales in the index calculation formula have been adjusted when adding the new wS parameter in the price index calculation formula, capping; adjusting the wFOL scale in the index calculation formula, adding the new wS parameter in the TRI index calculation formula...

The return of MWG shares to the VN Diamond basket has been predicted by many securities companies. According to the previous forecast, MBS Securities Joint Stock Company believes that MWG's TTM P/E, the coefficient reflecting the relationship between stock price and net income per share (EPS), is currently at 46.x, which is a level that may be sufficient to satisfy the P/E criteria. In addition, the foreign investor holding ratio (FOL) is at 95.6%, MWG's FOL satisfaction criteria of over 95% at the review period is also likely to be met.

According to BIDV Securities Joint Stock Company (BSC), MWG shares were added in this period due to the criteria of increasing the diversity of the index basket when there is a group of stocks in the same industry (this assessment period is the Banking group) that is subject to a 40% capitalization weight limit, and is also the stock with the highest FOL coefficient for review.

Meanwhile, SSI Research once predicted that MWG shares could be added to the index basket but in the next period. This assessment is based on the fact that MWG shares have satisfied the P/E criteria (a coefficient reflecting the relationship between stock price and net income per share (EPS)) according to the new index rules (

MWG stock price movements from the beginning of 2024 to present

Currently on the market, there are 4 ETF funds using the reference index VN Diamond including DCVFM VN Diamond ETF (FUEVFVND) with a scale of 13,000 billion VND, MAFM VN Diamond ETF (FUEMAVND) with a scale of 443 billion VND, ETF BVFVN Diamond (FUEBFVND) with a scale of more than 56 billion VND and ETF KIM GROWTH VN Diamond (FUEKIVND) with a scale of 106 billion VND.

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