KDH Stock Faces VN-Diamond Index Removal Risk, ETF Selling Over 4M Shares

Overview

Khang Dien House (KDH) stock may be placed on a watchlist for removal from the VN-Diamond index due to its foreign ownership limit (FOL) ratio failing to maintain the minimum 65% threshold. BSC forecasts this could trigger ETF selling of over 4 million KDH shares, while FPT, MBB, and TCB are projected to see increased ETF buying as their index weightings rise. The HoSE will announce the official VN-Diamond index composition on April 20, 2026, effective May 4, 2026.

Key Facts

• KDH’s FOL ratio was 61.8% as of March 31, 2026, below the 65% minimum for VN-Diamond inclusion.
• BSC forecasts over 4 million KDH shares could be sold by ETFs if removed, with NLG facing 3.3 million and HDB 1 million in potential ETF sales.
• FPT is projected to see ETF buying of 4.6 million shares, MBB 900,000, and TCB 900,000 due to increased weightings.
• KDH’s index weighting would be cut by 50% if placed on the watchlist, reducing its contribution to a modest 0.8%.
• The next semi-annual review in July 2026 could see KDH officially removed if the FOL ratio does not improve above 65%.
• FPT’s weighting is expected to rebound to 15% from 11.5% due to an adjustment in its capitalization limit to 80% from 38%.
• HoSE will announce the VN-Diamond index composition on April 20, 2026, with changes effective May 4, 2026.

What Happened

BIDV Securities (BSC) has forecast that Khang Dien House (KDH) stock may be placed on a watchlist for removal from the VN-Diamond index. This prediction, based on data as of March 31, 2026, stems from KDH’s foreign ownership limit (FOL) ratio falling below the required minimum of 65%, recorded at 61.8%. According to BSC’s analysis, this could lead to ETF selling of over 4 million KDH shares as funds adjust their portfolios to reflect the index change. The forecast aligns with a similar projection from Mirae Asset Securities, which also cited KDH’s FOL ratio shortfall.

In contrast, BSC anticipates no new additions to the VN-Diamond index but projects increased weightings for several existing constituents. FPT is expected to see the most significant ETF buying at 4.6 million shares, followed by MBB and TCB at 900,000 shares each. This shift is partly driven by adjustments in FPT’s capitalization limit, which is set to increase from 38% to 80%, allowing its weighting to rebound to 15%. The HoSE is scheduled to announce the official index composition on April 20, 2026, with any changes taking effect on May 4, 2026.

Market Context

KDH trades on the HoSE and closed unchanged at VND 26 on April 14, 2026, with volume of 3.0 million shares, reflecting muted activity ahead of the index announcement. The real estate sector has faced headwinds, and KDH’s potential index removal adds to sector-specific pressures. Meanwhile, FPT closed at VND 76, up 0.26%, but has declined 22% year-to-date, underperforming the VN-Index’s 6.1% drop, partly due to foreign net selling estimated at VND 9,350 billion in early 2026. The anticipated ETF buying could provide near-term support for FPT, MBB, and TCB, while KDH, NLG, and HDB may face selling pressure.

Strategic Significance

For long-term investors, this development highlights the critical role of foreign ownership limits in Vietnamese index inclusion criteria, particularly for real estate firms like KDH. A low FOL ratio not only restricts foreign investment directly but can also trigger passive fund outflows, exacerbating liquidity challenges. The rebalancing underscores the dynamic between regulatory constraints and market access, where companies with stable FOL ratios, such as FPT, benefit from index-driven inflows despite broader market sell-offs.

What to Watch

• HoSE’s official VN-Diamond index composition announcement on April 20, 2026.
• KDH’s FOL ratio updates in the lead-up to the semi-annual review in July 2026.
• ETF flow data for KDH, FPT, MBB, and TCB following the index change effective May 4, 2026.
• Quarterly financial results from KDH to assess any fundamental drivers amid index-related volatility.
• Regulatory changes or company actions to improve KDH’s FOL ratio above 65%.