ETF Monitor – Tailwinds from new foreign ETFs inflows

• Together with the capital raising of Fubon ETF and the change in Vietnam portion of V.N.M ETF, we expect foreign inflows of c.VND6,100bn in the next couple of weeks.
• Based on our estimate, HPG, VCB, VNM might be among top buy, while STB and PLX are likely in top sell by foreign ETFs in Mar 2023 review.

New inflows from Fubon’s capital raising and VanEck’s index change

Fubon FTSE Vietnam, the second largest ETFs in term of net asset value, has successfully increased its capital by NT$5bn (~VND3,800bn) which might flow into Vietnam stock market during this Mar. Additionally, VanEck Vietnam ETF (V.N.M ETF) will change the tracked index from MVIS Vietnam Index (80% are Vietnam stocks) to MVIS Vietnam Local index (100% are VN stocks) from 17 Mar 2023 onward. Thus, V.N.M ETF might inject about VND2,300bn into Vietnam stock market (~ 20% its current NAV). All in, we estimate inflows of c.VND6,100bn coming to Vietnam stock market in the next couple of weeks, which will end the net-sell activities of foreigners.

ETFs review in Mar 2023: HPG, VCB and VNM might be among top buy

FTSE Vietnam Index announced the review result on 3 Mar 2023 which be effective on 17 Mar 2023. Accordingly, SHB and EIB will be added to the index while STB, PLX, PDR and TCH were excluded. The rebalancing process will be applied from 06 Mar 2023 to 17 Mar 2023.
MVIS Vietnam Local index (V.N.M ETF) will announce the review result on 10 Mar 2023, effective on 17 Mar 2023. We estimate STB will be removed in this review period as it failed the requirements of foreign ownership, while DCM and DXG will be added based on the portfolio structure of MVIS Vietnam Local index.
Altogether, we estimate three foreign ETFs will strongly buy HPG (~VND624bn), VCB (~VND547bn) and VNM (~VND476bn) during the trading week 13-17 Mar 2023, before effective date of new basket of these ETFs. On the other hand, STB will be sold strongly with a value of VND153bn after being removed from these ETFs as STB failed the foreign ownership criteria, following by PLX with a value of VND39bn.
Based on the last 10 trading days data, top stocks that will experience the longest trading days of foreign ETFs in this review include: SAB (15.6 days); VJC (9.5 days) and VCB (7.9 days).

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