How important is the VN30 select stock index in Vietnam to the Asian market?

Vietnam’s stock market has been attracting the attention of global investors over the past year, driven by the country’s high-growth economy and a conducive investment environment, resulting in a strong overall stock market movement. In this context, the Vietnamese stock index with the VN30 Index, which serves as an indicator reflecting the overall picture of the top 30 companies, has become an important tool for assessing Vietnam’s market potential. This article will help you understand the meaning, features, and investment value of this index in depth.

Basic Differences Between VN30 and VN Index

Before truly understanding VN30, it is important to distinguish it from the general VN Index.

VN (VN Index) measures the overall performance of all listed stocks on the Ho Chi Minh City Stock Exchange (HOSE), covering companies of various sizes, both highly liquid and less so, making this index more volatile but providing a comprehensive reflection of the market.

Conversely, VN30 Index is designed to select only the top 30 stocks with the highest market value and superior liquidity. The stocks in this index account for approximately 70-80% of the total market capitalization of Ho Chi Minh City. This means that movements in VN30 reflect the trend of large-cap companies with active trading, making it a suitable indicator for investors seeking to measure the performance of high-quality stocks.

Structure and Calculation of VN30 Index

The VN30 Index is calculated using the Free-Float Adjusted Market Cap-Weighted method, meaning stocks are weighted according to their market value adjusted for the freely tradable shares. Companies with larger market capitalization have a greater weight in the index.

The sector allocation of stocks in the index is as follows:

• Financials (Financials): 45% – including banks and insurance companies
• Real Estate (Real Estate): 20% – property developers and commercial real estate firms
• Consumer Staples (Consumer Staples): 11% – food, beverages, and other consumer products
• Materials (Materials): 8.5% – steel producers, chemicals, and raw materials

The three most influential stocks on the index’s movement are FPT (Technology), HPG (Steel), and ACB (Bank).

Criteria for Selecting Companies into VN30

Getting into the VN30 index is not easy; there are strict criteria:

Market Capitalization (Market Capitalization): The company must be among the top 30 with the highest market value, calculated by stock price multiplied by total shares.

Liquidity (Liquidity): Continuous trading is required, with at least 80% of trading days over the past 6 months, assessed by average daily trading value.

Free-Float: The number of shares available for trading must be more than 5% (excluding shares held by major shareholders or management that are not circulating).

Share Type: Only common shares (Common Shares) are eligible.

Financial Condition: The company must not be under any market alert, such as being suspended or under special supervision.

The review and adjustment of the VN30 index are conducted twice a year to allow companies that improve liquidity or experience changes to enter or exit the index systematically.

Major Members of VN30 Index

The stocks comprising VN30 are diverse, covering many key industries:

Factors Presenting Investment Opportunities

Why does VN30 remain an attractive option:

Steady Economic Growth: Vietnam continues to be one of the fastest-growing economies in Asia, supporting corporate profit expansion.

Foreign Investment Policies: The Vietnamese government has policies favorable to foreign investment, encouraging capital inflows into the stock market.

Economic Diversity: VN30 covers various sectors, from banking, real estate, and technology to consumer goods, allowing investors to diversify effectively.

Long-term Growth Opportunities: Many companies in the index are still expanding and have not reached market saturation.

Factors Influencing VN30

The movement of this index results from a complex set of factors:

Domestic Factors:

• Fiscal and monetary policies, such as interest rate cuts or infrastructure investments
• Corporate earnings directly affecting stock prices and the index
• Inflation rate and central bank inflation management
• Political stability

External Factors:

• Global economic conditions, including trade wars
• Monetary policies of developed countries, such as the US, where rising rates may attract capital away from emerging markets
• Commodity prices Vietnam exports, as it is a major commodity-dependent country

Analyzing Investment Opportunities from VN30

Vinhomes (VHM) – Real estate sector Current price 41,750 VND | P/E: 7.86 times | P/B: 0.97 times

As Vietnam’s largest real estate developer, Vinhomes has numerous high-quality projects across the country. Growing middle-class demand indicates long-term growth potential.

Vietcombank (VCB) – Financial sector Current price 93,000 VND | P/E: 16.21 times | P/B: 2.77 times

As a leading bank with an extensive branch network, the stability and growth of the banking sector depend on the overall economic expansion.

Hoa Phat Group (HPG) – Materials sector Current price 24,850 VND | P/E: 14.74 times | P/B: 1.47 times

A leading steel producer benefiting from large infrastructure projects. Increasing construction projects in Vietnam will support demand for steel and materials.

Vinamilk (VNM) – Consumer goods sector Current price 71,900 VND | P/E: 17.41 times | P/B: 4.44 times

Vietnam’s top dairy company with international recognition and growing consumer purchasing power, offering value-added products.

Summary and Perspectives

Vietnam’s stock index VN30 remains a significant investment benchmark in Asia. The performance and outlook of companies within VN30 reflect the potential of Vietnam’s economy in the coming period.

However, investors should carefully assess their risk tolerance, investment goals, and time horizon. For those seeking emerging markets with high growth potential, the Vietnam stock index VN30 could be a valuable option.