On the morning of 11/11/2020 by Vietnam time, MSCI announced to add 13 codes to the MSCI Frontier Markets Small Cap Index basket, including 4 Vietnamese codes including APH, HPX, KHD and HSG. Notably for Kuwait, MSCI has removed 8 stocks from the MSCI Frontier Markets Index and 12 stocks from the MSCI Frontier Markets Small Cap Index MSCI Frontier Markets Small Cap Index The MSCI Frontier Markerts Small Cap Index basket in this period was recorded strong fluctuations with 17 excluded stocks, of which Kuwait accounted for 12 stocks. On the contrary, there were 12 newly added codes, of which Vietnam accounted for 4 codes including APH, KDH, HPX and HSG. Accordingly, the number of securities in the index basket decreased to 153 stocks.

As of October 30, 2020, Kuwait market still accounts for the largest proportion (17.97%) of the index portfolio, followed by Bangladesh (17.97%) and Vietnam (12.6%).

MSCI Frontier Markets Index

During the portfolio review in the fourth quarter of 2020, MSCI eliminated 10 stocks from the MSCI Frontier Markets Index basket, of which Kuwait accounted for 8 stocks, 1 code of Oman and 1 code of Lithuania. In the opposite direction, MSCI added 1 code of Kenya and 1 code of Lithuania.

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Thus, the number of shares in the portfolio of the MSCI Frontier Markets Index - the reference index for the MSCI Frontier Markets Index ETF fund decreased to 81 stocks. In which, Vietnam is still present with 12 codes, including VIC, MSN, VCB, HPG, STB, BVH, GAS, BID, VNM, SAB, POW and HDB. As of October 30, 2020, Kuwait market still accounts for the largest proportion in the MSCI Frontier Markets Index basket with 36.15%, while the Vietnamese market ranks second with 18.47%. Top 10 largest stocks in the MSCI Frontier Markets Index portfolio have 3 names from Vietnam, including VIC, VNM and VHM.

Regarding the industry structure, finance is still the sector that accounts for the largest proportion in this index list with 50.47%. It was followed by telecommunications services (13.5%) and real estate (10.83%).

All changes will take effect after Friday 27/11/2020 session closing time. The next listing of MSCI is announced on 9/2/2020 CEST (UTC +1 time zone), which means that it is on the early morning of February 10, 2020 in Vietnam time. MSCI will withdraw Kuwait from the frontier market basket in 5 steps Previously, on November 9, MSCI concluded that the withdrawal of Kuwait from the frontier market basket would undergo 5 steps corresponding to 5 MSCI's portfolio reviews (lasting more than 1 year), instead of reducing rate of Kuwait once about 0%. The first batch started in November 2020 review.

The reason behind is that Kuwait accounts for the highest proportion in the MSCI Frontier Markets 100 (more than 25%), and to reduce concerns for funds about completing the distribution of investment proportions in markets during a short time. At the same time, MSCI will continue to maintain the proportion of shares of Bangladesh, Lebanon and Nigeria in the frontier market basket to ensure compliance with the diversification principle in MSCI Frontier Markets 100 Index calculation method. According to simulated estimates of MSCI, the share of Vietnam in the MSCI Frontier 100 Index can be raised to 15.76% after phase 1 and to 28.76% when Kuwait is completely removed from the index basket. . With the current share of Vietnam in the iShare MSCI Frontier 100 ETF  basket is now 12.65%, the proportion of Vietnam is likely to increase by more than 3% after phase 1.

Source:https://ndh.vn/chung-khoan/aph-hpx-hsg-va-kdh-vao-ro-msci-frontier-markets-small-cap-index-kuwait-len-thi-truong-moi-noi-1279798.html