KDH Set for VNDiamond Exit as Yuanta Flags April 2026 Removal

Overview

Yuanta Securities forecasts that Nhà Khang Điền (KDH), listed on HOSE, will be removed from the VNDiamond index starting with the April 2026 review period, after failing to meet the minimum 65% foreign ownership requirement. The brokerage also flags FPT and MSB as borderline cases that could move to the removal watchlist, a scenario that would redirect ETF rebalancing flows across the index’s constituents.

Key Facts

• KDH’s 12-month average foreign ownership is estimated at 53.0%, below the 65% minimum; the stock has been on the removal watchlist since the April 2026 period.
• No out-of-index candidate meets the 95% foreign ownership threshold for new inclusions; the closest are HCM at 68.8% and VCB at 68.6%.
• FPT and MSB carry 12-month average foreign ownership of 65.8% and 65.9% respectively, just above the 65% cutoff.
• Banks remain capped at 40% of the index; MWG is capped at 15%; GMD’s forecast weight of 14.5% sits close to the 15% limit.
• Six VNDiamond-tracking ETFs held total net assets of about VND 11,023 billion as of 21 October 2026, with Dragon Capital’s FUEVFVND accounting for 96.4%.
• Estimated two-way trading value from the rebalancing is about VND 1,480 billion, based on 21 October NAV and 23 October closing prices.
• HOSE applies a new index schedule under Decision 736/QĐ-SGDHCM dated 29 September 2026: results are published on the first Monday and take effect on the third Monday of November.

What Happened

Yuanta’s forecast, reported in Vietnamese financial media, centres on the foreign-ownership screen that governs VNDiamond eligibility. KDH’s 12-month average foreign ownership of roughly 53.0% leaves it well short of the 65% floor, confirming its removal from the April 2026 period. The brokerage found no out-of-index stock meeting the 95% foreign ownership condition required for new entrants, with HCM and VCB the nearest candidates but still far from qualifying.

The note also models two edge cases. If HOSE’s official foreign-ownership data differs slightly from Yuanta’s estimates, FPT or MSB could shift to the removal watchlist. In that event, FPT’s weight would fall to about 7.7% and net selling by the funds would rise to roughly 13.2 million shares, more than three times the base-case forecast, with the freed weight distributed to non-bank constituents. A similar MSB scenario would lift net selling from 10.2 million to 12.7 million shares, with the reallocated weight flowing to TCB, MBB, VPB and HDB because the banking block stays at its 40% cap.

Market Context

KDH closed at VND 14,750 on 26 October 2026 on HOSE, a level that reflects the persistent discount the stock has carried through the year. Index removal is a mechanical event rather than a fundamental one, but it matters for a real-estate name with limited foreign headroom: passive funds tracking VNDiamond will need to sell, and the resulting supply arrives into a sector already weighed down by slow residential absorption and tight credit for developers. FPT closed at VND 56,000 and MSB at VND 15,500 on the same date, both sensitive to any confirmation of watchlist status given their larger index weights.

Strategic Significance

The core issue for long-term holders is that KDH’s low foreign ownership is structural, not cyclical. A 53% ratio against a 65% requirement means the stock cannot re-enter VNDiamond without a material change in its foreign room, which in practice would require either a cap adjustment or a shift in the shareholder base. That removes a source of passive demand and leaves KDH more dependent on domestic institutional and retail flows. For the broader index, the episode highlights how concentrated VNDiamond flows are: FUEVFVND alone holds 96.4% of the roughly VND 11,023 billion in tracking assets, so rebalancing decisions by a single fund manager dominate the trading impact on every constituent.

What to Watch

• HOSE’s official index review announcement, due on the first Monday under the new Decision 736 schedule, confirming KDH’s removal and FPT/MSB status.
• The effective date on the third Monday of November, when ETF rebalancing trades settle.
• FUEVFVND’s published portfolio and cash ratio, given its 96.4% share of tracking assets.
• KDH foreign-ownership filings for any change to the 12-month average that could alter the removal case.
• Q4 2026 earnings and pre-sales disclosures from KDH, which will indicate whether domestic demand can offset the loss of passive flows.