Phat Dat realtor proposed to MSCI Frontier Market 100 index

By Van Pham   November 10, 2020 | 06:00 pm PT
Global index research and analysis organization Morgan Stanley Capital International (MSCI) has proposed the inclusion of Phat Dat Real Estate Development Corporation (PDR) into the MSCI Frontier Market 100 Index.

PDR is among two new Vietnamese entries among the top 28 listed companies on the index following Kuwait’s promotion to emerging market category. As of October 28, PDR’s market capitalization has reached VND15.625 trillion (over $675 million).

According to MSCI, Vietnam’s ratio in the MSCI Frontier Markets 100 Index and MSCI Frontier Market Index will increase to 28.76 percent and 25.2 percent respectively, following Kuwait’s reduction to 0 percent.

Vietnam's current ratio in each index is 12.53 percent and 17.5 percent, ranking second after Kuwait. MSCI Frontier Market Index includes 89 stocks within the mid- and large-cap market capitalization group of 28 Frontier Market countries. These stocks comprise approximately 85 percent of total market capitalization post-adjustments for each country’s free float rates.

MSCI Frontier 100 Index includes stocks with the highest capitalization and liquidity on the market, selected from MSCI Frontier Markets Investable Market Index that fulfills additional requirements for free float rates and foreign ownership. The number of constituents in this index range from only 85 to 115 tickers.

Currently, iShares MSCI Frontier 100 ETF, the only ETF fund directly monitoring MSCI Frontier Markets 100 Index with an approximate AUM of $380 million, is expected to acquire a significant quantity of Vietnamese shares, including PDR.

Additionally, several active funds with total AUM of approximately $4 billion utilize the MSCI Frontier Markets Index as main reference, including Schroder ISF Frontier Markets Equity ($10 million), Templeton Frontier Markets Fund ($356 million), Baring International Umbrella Fund ($330 million), and Magna Umbrella Fund PLD - Magna New Frontiers Fund (S290 million). These funds’ upcoming decision to invest in Vietnamese stocks depends on their respective fund managers. However, in the short term, stocks on these indices will benefit directly first.

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