HO CHI MINH CITY -- VNX Allshare, a new Vietnamese common index, will be launched on Oct. 24, adding to the current two indexes in the country.
A total of 451 stocks will be listed on the VNX Allshare, comprising 237 from the Ho Chi Minh Stock Exchange and 214 from the Hanoi Stock Exchange (HNX), accounting for around 92% of the combined market capitalization.
Last year, the government announced that it would restructure its stock exchanges, as it sought to upgrade the country's stock market to "emerging" status from "frontier."
The new index will also facilitate the development of derivatives and exchange-traded funds.
Vietnam's State Securities Commission intends to attract more foreign investment by implementing the new index. Its plan is to eventually merge the two current indexes by 2020.
After months of debate, the Vietnamese government recently agreed to locate a new operating entity of the bourses in Ho Chi Minh City, the country's economic hub, after merging the stock exchanges into a single state-run Vietnam Stock Exchange. According to the plan, the Vietnam Stock Exchange will be operated as a joint stock company until 2020, when the state would reduce its ownership to 75%.
In the first half of this year, large-cap companies listed on HNX had registered to move to HOSE, whose benchmark VN-Index has risen by more than 18% this year, one of the best performers in the Association of Southeast Asian Nations.
HOSE had said that it was concentrating on strengthening the domestic market for sustained development over the next five years, by increasing its size and liquidity. It is hoping to expand the market's capitalization to 60% of gross domestic product, and to meet the standards of other markets in ASEAN.