What is Vnindex – Troubleinthepeace

Perhaps you have encountered many times the phrase vnindex appeared many times on television. So what is Vnindex? How are they calculated and meaningful? Let’s find out with Hocviendautu through the article below!

What is VN-Index?

VNindex is an index showing the trend of price movement of all stocks listed and traded on the Ho Chi Minh Stock Exchange (HOSE). When the index is green, it represents an increase, and red indicates a decline. The Vnindex shows a comparison of the current market capitalization with the underlying market capitalization on the base date. July 28, 2000. The first day that the stock market officially went into operation. The base market capitalization calculated in the index formula is adjusted in the following cases: new listing, cancellation listing, changes in listed capital. This is a set of indexes built and managed by the Ho Chi Minh City Stock Exchange.

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VN-Index stock illustration

How to calculate Vn_Index

Calculation formula:


Formula for calculating VN-Index

In there:

Meaning of Vn_Index

Describe investor sentiment

Stock indexes describe investors’ sentiments and attitudes towards the state of the economy.

Describe the performance of the stock market

Describe the growth of the economy

Stock indexes show the growth strength, and growth rate of the economy. When the economy shows signs of growth, businesses have good financial structure, do well, business health is maintained at a stable level and grows steadily, leading to more investors. interested in stocks as a channel of investment and financial accumulation. For example: at the beginning of 2016 the vnindex was ~500 points, this is a time when the market economy and the world have positive developments, since then until now, VN-Index has increased more than once. double.

See also: What is Sense


Meaning of VN-Index

USAdescribe the recession of the economy

2006 and 2007 were two years with a sharp increase in the accumulation of corporate securities for investors. The demand for buying and selling shares is not as diverse as the current market capacity, but it is a rapidly growing investment channel. At the end of 2007 from the global crisis, leading to business difficulties, value investment in stocks fell, causing the stock market to plummet at that time. The signs of recession of the economy caused investors to sell off, and gradually turned to other financial accumulation channels.


Meaning of VN-Index

Describe the shift and change in the economic structure

In the post-crisis period, since 2007, the economy has shown signs of recovery, and a structure of new industries has arisen and moved according to fluctuations of the world economy. The rudimentary industries moved to industries such as services, industry, export, urban social infrastructure… In this period, the world also saw shifts towards the industrial revolution 4.0, leading to new industrial revolutions. Business activities in Vietnam also change a series of factors in terms of labor force, currency, investment status, and especially the participation of foreign investors.

See more: What is Ftu – Foreign Trade University

Weaknesses of VN-Index

The biggest disadvantage of Vn-Index is taking the entire market capitalization of all companies listed on the market as a number. Therefore, some large-cap companies like VIC can influence the rise and fall of the index. It is quite the opposite when some companies have large capitalization values, the free float volume is quite small. But they do affect the index.

Through the above article, hope you have more useful knowledge in investing. If you have any questions, please contact us as soon as possible. Good luck with your trading!

Category: FAQ

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