Recently, world-leading index research and analysis organisation Morgan Stanley Capital International (MSCI), has proposed the inclusion of Phat Dat Real Estate Development JSC (HSX: PDR) in the MSCI Frontier Market 100 index within their most recent October report. PDR is amongst the two new entries to Vietnam's Top 28 listed companies in the index following Kuwait’s promotion to Emerging Market category. Until October 28, Phat Dat's market capitalisation has reached VND15.625 trillion ($679.35 million).
|Phat Dat has just bought 24ha of land, officially launched a project of general warehouse, port logistics, and logistics services near Cai Mep Port |
According to MSCI’s calculations, Vietnam’s ratio within the MSCI Frontier Markets 100 Index and MSCI Frontier Market Index shall increase to 28.76 per cent and 25.2 per cent, respectively, following Kuwait’s reduction to 0 per cent.
Vietnam’s current ratios in each index are 12.53 and 17.5 per cent, respectively, ranking second after Kuwait. MSCI Frontier Market Index includes 89 stocks within the mid- and large-cap market capitalisation group in 28 Frontier Market countries. These stocks compose of approximately 85 per cent of total market capitalisation post-adjustments for each country’s free float rates.
Meanwhile, MSCI Frontier 100 Index includes stocks with the highest market capitalisation and liquidity on the market, being selected from the MSCI Frontier Markets Investable Market Index that fulfills additional requirements for free float rates and foreign ownership room. The number of constituents of this index are only allowed ranging from 85 to 115 tickers.
|Top 10 active funds |
Currently, iShares MSCI Frontier 100 ETF, the only ETF fund that is directly monitoring MSCI Frontier Markets 100 Index with approximate assets under management (AUM) of $380 million, is expected to acquire a significant quantity of Vietnamese shares, including PDR.
Additionally, there are many other active funds with the total AUM of approximately $4 billion, utilising the MSCI Frontier Markets Index as the main index of reference. Primary examples include Schroder ISF Frontier Markets Equity ($410 million), Templeton Frontier Markets Fund ($356 million), Baring International Umbrella Fund ($330 million), and Magna Umbrella Fund PLD – Magna New Frontiers Fund ($290 million). These funds’ upcoming decision to invest into Vietnamese stocks are dependent on their respective fund manager. However, in the short term, stocks in these indices will benefit directly first.