Changing the HOSE-Index index set, improving the quality of the VN30 basket from March 2025

The screening criteria on liquidity, after-tax profit and capitalization limit of stocks in the same industry will be applied in HOSE-Index version 4.0, effective from March 2025.

The screening criteria on liquidity, after-tax profit and capitalization limit of stocks in the same industry will be applied in HOSE-Index version 4.0, effective from March 2025.

Ho Chi Minh City Stock Exchange (HOSE) has just issued the Rules for Building and Managing the HOSE-Index Version 4.0, attached to Decision No. 747/QD-SGDHCM of the Chairman of HOSE. Accordingly, the HOSE-Index Version 4.0 will officially take effect from March 2025.

The VN30 index was launched by HOSE on February 6, 2012, accounting for 69.37% of the market capitalization of the entire stock market listed on HOSE (according to data as of December 31, 2024).

The VN30 Index is the underlying asset for futures contracts listed and traded on the Hanoi Stock Exchange (HNX). The VN30 Index is also the reference index for 04 Exchange Traded Funds (ETFs) listed on HOSE and 03 ETFs listed on regional stock markets. In addition, the VN30 Index is also the criterion for screening the underlying securities portfolio for covered warrants listed on HOSE.

HOSE said that the rules of the HOSE-Index version 4.0 have been adjusted to suit the actual situation, while ensuring the stability and quality of the index as well as increasing the liquidity of stocks in the index basket.

Version 4.0 will further enhance the liquidity screening criteria. Increasing the trading volume and matched transaction value when selecting stocks will help increase the liquidity of the stocks selected for the basket.

Specifically, the constituent stocks of the VNAllshare index will be considered for selection based on the volume of matched transactions. Stocks with a volume of less than 300,000 shares and stocks with a value of less than VND30 billion will be removed from the consideration list. According to HOSE-Index version 3.1, the minimum volume of matched transactions is 100,000 shares and the minimum value of matched transactions is VND10 billion.

Provisions related to Profit after tax are also added in version 4.0. Profit after tax in version 4.0 of HOSE-Index is defined as profit after tax collected from the most recent audited semi-annual financial statements or the most recent audited annual financial statements of the listed organization. Use Profit after tax of parent company shareholders on the consolidated financial statements in case the listed organization is the parent company and use the consolidated financial statements in case the listed organization is a superior accounting unit with affiliated accounting units.

Profit after tax is the criterion considered in screening stocks to participate in the VN30 Index basket. Stocks with negative profit after tax will be removed from the consideration list, and only financial statements with an audit opinion of full acceptance will be considered. In case stocks have positive profit after tax and financial statements with an audit opinion of full acceptance but contain issues to note, issues to emphasize or other issues of the auditor, HOSE will seek the opinion of the Index Council on whether or not to remove these stocks in determining the VN30 basket.

HOSE said that adding the financial criterion of non-negative profit after tax helps improve the quality of stocks screened into the VN30 index basket, affirming that the enterprises in this index basket are all enterprises with good development foundations.

The new version also adds a limit on the capitalization ratio of the same industry group of stocks in the VN30 index basket. Accordingly, the VN30 index adds a capitalization ratio limit of 40% applied to the same industry group of stocks (version 3.1 does not have this regulation).

In addition, HOSE-Index version 4.0 also adjusts the time frame for announcing information on changes to the list of component stocks of the indexes on the 3rd Wednesday of January and July every year, and announces updated information on the circulating volume and free-float of component stocks on the 3rd Wednesday of January, April, July and October every year.

The capitalization ratio of stocks in the same industry in the VN30 index basket is limited to 40%, which will contribute to stabilizing the industry structure and limit the proportion of one industry in the index basket being too large.

Market capitalization proportion by industry of stocks in the VN30 group as of December 31, 2024. Source: HoSE

With these new regulations, the VN30 basket is expected to have many changes in the coming time. Currently, the proportion of stocks in the banking and finance group is large, accounting for over 50% of the capitalization of the entire VN30 index basket.

Source: https://baodautu.vn/thay-doi-bo-chi-so-hose-index-nang-chat-luong-cho-ro-vn30-tu-thang-32025-d240563.html