Vietjet shares forecast to be added into ETF investee list

Friday, Aug 23, 2019 15:47

A Vietjet aircraft. The aviation firm's shares may be purchased by the US-listed fund VanEck Vectors Vietnam EFT in the upcoming quarterly portfolio review. — Photo

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 per cent of VNM ETF’s total investment. Vietnamese shares are taking 71.83 per cent of VNM ETF’s total country’s weightings – much higher than other markets such as South Korea (14.65 per cent), Japan (5 per cent) and Taiwan (4.61 per cent).

To be admitted, a company must have at least 10 per cent of its total free-float shares available for foreign ownership, a market value of at least US$150 million and a three-month daily average trading value of minimum $1 million.

Vietjet is listed on the Ho Chi Minh Stock Exchange as VJC. The company shares rose 0.8 per cent to trade at VND132,000 ($5.67) 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 VND184,840 per share on April 2, 2018.

The company caps its foreign ownership limit at 30 per cent of capital and there is now a 10.77 per cent room for foreign investment.

In the first six months of 2019, Vietjet earned VND26.3 trillion ($1.13 billion) in combined revenue, up 24 per cent year on year, and VND2.4 trillion in pre-tax profit, up 11 per cent 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 Viet Nam’s country weighting from 71.63 per cent to 73-74 per cent.

To remain in VNM ETF’s portfolio, a company must have at least 5 per cent of total free-float shares available for foreign ownership and a market value of at least $75 million.

In addition, the trading value of the company shares must at least average $600,000 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), steel maker Hoa Phat (HPG), PetroVietnam Power Corp (POW), SSI Securities (SSI), FLC Faros Construction Corp (ROS) and Sai Gon Thuong Tin Commercial Bank (STB). — VNS

Comments (0)