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HNX-Index to be phased out in exchange revamp
The HNX-Index will be replaced by a new benchmark index, the HNXFF-Index, in a year's time, the Ha Noi Stock Exchange has announced recently.
The new index will be put into operation in December. After another year, the HNX-Index will no longer exist.
The HNXFF-Index's debut value will be the HNX-Index's December 2 value.
The establishment of the HNXFF-Index marks the first time a benchmark index is formed by the free-float methodology, which means taking the equity's price and multiplying it by the number of shares readily available in the market. Instead of using all of the outstanding shares like the full-market capitalisation method, this method excludes locked-in shares such as those held by promoters, company officers, controlling-interest investors and the Government. Therefore, stocks eligible for the HNXFF-Index must have a minimum free float rate of 5 per cent.
In addition, the exchange will also launch a set of indices based on the scale of shares, including the HNX Large Cap Index and HNX Mid/Small Cap Index.
Specifically, the HNX Large Cap Index will be comprised of 50 stocks with the highest average market capitalisation value within six months prior to the calculation and charter capital of at least VND120 billion (US$5.6 million) by the time of the calculation.
The HNX Mid/Small Cap Index will consist of stocks listed for at least six months with a free float rate of at least 5 per cent, which are not suspended for three months before the time of calculation.
The revision of these indices will be conducted periodically in April and October.
Another set of indices is the industry index, including the HNX Manufacturing Index, HNX Construction Index and HNX Financials Index. In order to limit the impact of large stocks on each index, the exchanges applies the maximum capitalisation proportion of 20 per cent for each stock.
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