HNX-30 Index continues to underperform
Investors are struggling to work out where to invest in the HNX30, which tracks the performance of the 30 largest stocks on the Hanoi Stock Exchange by market capitalization and trading liquidity.
Launched in 2012, the HNX30 was expected to become a reference index, but after more than six years, it has not been able to escape the “shadow” of the benchmark VN30 Index.
The VN30 Index tracks the performance of the 30 largest stocks on the Ho Chi Minh Stock Exchange.
Among the 30 stocks in the HNX30 basket, few of them have attracted investors. Prices of some stocks are even hovering around just VND 1,000 per share. The capitalization of these stocks is usually modest. The total market capitalization of the stocks in the HNX30 basket as of November 21 was only VND116.6 trillion, while the figure for the VN30 basket reached more than VND1.89 quadrillion.
When mentioning the HNX30, investors usually think of major stocks such as Asia Commercial Joint Stock Bank (ACB), Viscostone Joint Stock Company (VCS), PetroVietnam Technical Services Corporation (PVS) and Saigon-Hanoi Commercial Joint Stock Bank (SHB). In terms of market capitalization, ACB ranks only 27th in the market and even lower than some shares trading on the Unlisted Public Company Market (UPCoM).
Investors usually focus on liquidity, but in November, the total trading volume on the HNX30 only reached 470 million shares, equivalent to VND8.1 trillion, while the figures for the VN30 basket were 1.15 billion shares, worth VND41.9 trillion.
Compared to HNX30, the VN30 has much larger and more effective businesses.
In the third quarter of this year, total revenue from businesses in the VN30 basket reached nearly VND238 trillion, up 16% year-on-year. After-tax profit reached VND27.2 trillion, up 15.5% year-on-year.
Meanwhile, the total revenue of those in the HNX 30 reached only VND 28 trillion, up 6.6% over the same period last year. After-tax profit reached VND 3.6 trillion, equivalent to only 13% of the total profit of firms in the VN30.
In Q3, 10 enterprises in the VN30 had a post-tax profit of over VND1 trillion, but only one in the HNX30 group did.
Total assets of the 30 businesses in the VN30 as of September 30 reached VND4.2 quadrillion, 5.4 times higher than the VND 772.5 trillion on the HNX30.
It is clear the Hanoi Stock Exchange needs certain adjustments to improve the quality of stocks trading on the course in general and those on the HNX30 basket in particular.
Nguyen Duc Huan, director of the HNX Trading System Department, said the HNX had been working on improving the quality of stocks trading on the course to attract investors. It was guiding firms to follow market regulations, standards on listing, training and information disclosure so that investors had sufficient information to make decisions before investing.
Every year, the HNX assessed the quality of firms’ information disclosure and corporate governance to encourage enterprises to improve transparency, Huan said.
The HNX was studying new orders and new trading methods. It would collect the opinions of market players and consider the appropriate time for implementation of these methods, Huan said.