Will OCB be added in VNDiamond next review?

According to VNDirect’s estimates, OCB will likely be added to the VNDiamond index, while KDH, NLG, and CTD might be excluded.

OCB could be included in VNDiamond in this review as OCB meets all of VNDiamond’s criteria.

A significant inflow of capital into VNDiamond

DCVFM VNDiamond ETF (exchange traded fund) remained the largest ETF in terms of NAV (net asset value) as of March 22, 2022, with VND14,963bn.beginning of 2022, the VNDiamond ETF has enjoyed a VND759bn inflow, just behind the Fubon ETF with a VND1,313bn inflow.

In 2022, VNDirect expects a strong capital inflow from Thai investors into VNDiamond thanks to the launching of the DR (Depositary Receipt) Diamond fund. According to Bualuang Securities, one of Thailand's largest securities firms, they are going to launch a DR Diamond fund based on the DCVFM VNDiamond ETF fund certificate. The IPO registration schedule was from March 22 to 24, 2022, and then the DR will be listed in the near future.

DR Diamond is the second DR of Bualuang Securities after the first DR VN30 based on the DCVFM VN30 ETF (E1VFVN30) was launched in 2018. Bualuang Securities reported to raise about VND3,500bn in DR VN30 to buy DCVFM VN30 ETF fund certificates in 2018.

In terms of indexes, VN Diamond grew 5.1% ytd, outperforming the performance of VNindex (-1.8% ytd) and VN30 (-3.7% ytd).

Forecast of the next review

The new VNDiamond index basket will be announced on April 18, 2022, and then come into effect on May 4, 2022.

Based on data until March 28,2022, VNDirect estimates OCB will be included in VNDiamond in this review as OCB meets all of VNDiamond’s criteria.

On the other hand, KDH and NLG miss the VNDiamond‘s foreign ownership requirements. The average foreign owned ratio and maximum foreign ownership limit should be greater than 80% to stay in the VNDiamond index. CTD is also likely to be excluded because its FY21 P/E ratio exceeds 3.0x the average market P/E.

"DCVFM VNDiamond ETF, with a total net asset value of VND14,963bn, will rebalance its portfolio on April 29, 2022. In this review, DCVFM VNDiamond ETF would newly buy OCB with about 9.6 million shares and also net buy REE, PNJ with about 6.7 million and 2.7 million, respectively", VNDirect estimated."

CTD, KDH, and NLG, on the other hand, will be divested of approximately 4.1 million, 5.7 million, and 6.2 million shares, respectively.