KDH Faces VNDiamond Exit in October 2026 Review as FOL Falls Short

Overview

Mirae Asset Securities (MASVN) forecasts that KDH (Nhà Khang Điền, HOSE) will be removed from the VNDiamond index at the October 2026 review after failing the 65% foreign ownership limit (FOL) maintenance requirement. The Ho Chi Minh Stock Exchange (HSX) is scheduled to announce the new constituent list on 19/10/2026, effective 02/11/2026, with index-tracking funds rebalancing between 26/10 and 30/10/2026. No new names are expected to be added, leaving the basket at 17 stocks.

Key Facts

• HSX is due to publish the new VNDiamond constituent list on 19/10/2026, effective 02/11/2026; tracking funds rebalance from 26/10 to 30/10/2026.
• KDH currently carries a 0.6% weight in the index; MASVN estimates about 4.2 million KDH shares would be sold by index-tracking funds on removal.
• MASVN’s assessment is based on data as of 17/09/2026, with all existing constituents meeting retention criteria except KDH.
• The VNDiamond addition threshold requires FOL above 95%, while leading candidates currently sit around 60-70%.
• FPT has posted FOL below 65% for several consecutive months; staying in the index requires an average FOL above 71.5% over the next six months, equivalent to roughly 138.2 million shares of net foreign buying.
• Estimated fund selling is concentrated in MSB (6.2 million shares), GMD (5.3 million shares) and KDH (4.2 million shares); buying is expected in PNJ (6 million), NLG (3.9 million) and REE (3.4 million).
• After the review, the largest weights are expected in FPT (15%), MWG (15%), PNJ (9.5%), TCB (8.7%) and ACB (7.7%).

What Happened

In its latest report, Mirae Asset Securities said KDH may be excluded from the VNDiamond basket for failing the minimum 65% FOL maintenance rule set out in section 3.7 of the index construction methodology. Based on data through 17/09/2026, the broker said current constituents still satisfy retention criteria, with KDH the sole exception. Because no new stocks qualify, tracking funds are expected to focus on rebalancing weights among existing holdings and fully exiting KDH.

The report also flagged FPT as a medium-term removal risk. FPT has recorded FOL below 65% for multiple consecutive months, and to remain in the basket it would need an average FOL above 71.5% over the following six months, implying net foreign purchases of about 138.2 million shares. MASVN described that hurdle as substantial. The report further noted that persistent foreign net selling has narrowed the pool of potential VNDiamond candidates, with the index applying a strict FOL threshold above 95% for inclusion while leading candidates sit near 60-70%.

Market Context

KDH closed at VND 15,800 on 20/09/2026, with the stock sitting in the Real Estate sector on HOSE. The forecast removal is a passive-flow event rather than an operating development: at a 0.6% index weight, the estimated 4.2 million shares of fund selling is modest relative to KDH’s typical liquidity, but it adds a technical overhang into the 26-30/10 rebalancing window. The broader VNDiamond review also touches banking names capped by the 40% sector limit and single-stock caps of 15% for FPT and MWG, reinforcing that this cycle is about weight redistribution rather than new inclusions.

Strategic Significance

For long-term holders, the key issue is the durability of KDH’s index membership and what it signals about foreign room. VNDiamond is designed to give foreign investors exposure to stocks with limited foreign ownership; a constituent that no longer meets the 65% FOL floor loses that eligibility, and with the addition bar at 95% FOL, re-entry is unlikely without a material change in foreign ownership. The FPT case is the more consequential signal for the index franchise: if a top-weight name with a 15% cap cannot rebuild FOL above 71.5%, the basket’s composition and its appeal to foreign-tracking capital could shift over subsequent reviews.

What to Watch

• HSX’s official VNDiamond constituent announcement on 19/10/2026 and the effective date of 02/11/2026.
• Actual fund flows during the 26/10-30/10/2026 rebalancing window, particularly whether KDH selling reaches the estimated 4.2 million shares.
• Monthly foreign ownership data for KDH and FPT to track progress toward the 65% and 71.5% thresholds.
• FPT’s foreign net buying trend, given the roughly 138.2 million shares needed to lift its six-month average FOL above 71.5%.
• Any change to the candidate pool if foreign net selling continues to compress FOL levels across potential additions.