The US-listed asset management fund VanEck Vectors Vietnam ETF (VNM ETF) may purchase shares of the new generation carrier Vietjet in its upcoming quarterly portfolio reshape.
The projection is made by Bao Viet Securities Co (BVSC). In this projection, VNM ETF will buy more than 19.2 million Vietjet shares to increase the number of Vietnamese companies in its portfolio to 19 from the current 18.
Vietjet shares will then account for 4.21 percent of VNM ETF’s total investment. Vietnamese shares are taking 71.83 percent of VNM ETF’s total country’s weightings – much higher than other markets such as the Republic of Korea (14.65 percent), Japan (5 percent) and Taiwan (4.61 percent).
To be admitted, a company must have at least 10 percent of its total free-float shares available for foreign ownership, a market value of at least 150 million USD and a three-month daily average trading value of minimum 1 million USD.
Vietjet is listed on the Ho Chi Minh Stock Exchange as VJC. The company shares rose 0.8 percent to trade at 132,000 VND (5.67 USD) per share on August 22.
The airline debuted on March 2, 2017 with more than 541.6 million shares. Its shares hit the highest level of 184,840 VND per share on April 2, 2018.
The company caps its foreign ownership limit at 30 percent of capital and there is now a 10.77 percent room for foreign investment.
In the first six months of 2019, Vietjet earned 26.3 trillion VND in combined revenue, up 24 percent year on year, and 2.4 trillion VND in pre-tax profit, up 11 percent year on year.
According to BVSC, VNM ETF will not sell any Vietnamese stocks from its portfolio in the next review and the fund will even up Vietnam’s country weighting from 71.63 percent to 73-74 percent.
To remain in VNM ETF’s portfolio, a company must have at least 5 percent of total free-float shares available for foreign ownership and a market value of at least 75 million USD.
In addition, the trading value of the company shares must at least average 600,000 USD in each day of the last three months or minimum 200,000 shares are traded each month in the last six months.
VNM ETF is listed on the New York Stock Exchange and has invested in 27 companies across Asia, including 18 Vietnamese companies.
The fund’s top 10 investees by market value include seven Vietnamese firms, which are property firms Vingroup (VIC), Vinhomes (VHM), Vincom Retail (VRE) and Novaland (NVL), dairy producer Vinamilk (VNM), Vietcombank (VCB) and insurer Bao Viet Holdings (BVH).
Other Vietnamese firms that have received funding from VNM ETF include consumer staple group Masan (MSN), steelmaker Hoa Phat (HPG), PetroVietnam Power Corp (POW), SSI Securities (SSI), FLC Faros Construction Corp (ROS) and Sai Gon Thuong Tin Commercial Bank (STB).