Background
Analyzing earnings quality is crucial because financial market participants recognize the potential for earnings manipulation Despite its limitations, earnings remain a focal point for most investors when evaluating securities Before making investment decisions, investors prioritize earnings alongside stock prices to assess a security's value over a financial year or quarter According to Sloan (2006), future earnings provide more valuable insights than intrinsic value for forecasting stock returns in the short term, specifically over the next 3 to 12 months.
Studying earnings quality is also important because it affects investors’ buy- hold-sell action This variable is an indicator to decide which firm is good and bad.
In the context of the Vietnamese stock market, the quality of financial information from listed companies poses significant challenges Many firms fail to accurately account for interest payments and do not fully report business management costs in their income statements Additionally, some companies manipulate accounting policies—such as extending depreciation periods from 15 to 25 years—to artificially inflate earnings by reducing reported expenses.
In the first half of 2010, Vitaly Joint Stock Company (VTA) took drastic measures to avoid delisting, including manipulating financial figures to report lower losses Notably, VTA halted the depreciation of five production lines valued at approximately 5.99 billion VND As a result, without this adjustment, the after-tax losses for the six-month period would have been reported at 29.09 billion VND instead of the stated 19.34 billion VND.
SaiGon Beverages Joint Stock Company (TRI) reported a profit of 10.6 billion for the first nine months of 2010; however, investor skepticism persisted due to TRI's history of volatility In 2008, TRI initially announced a profit of 750 million but later revealed a shocking loss of over 146 billion in Q4 In 2009, despite setting a profit target of 17 billion, the company ended the year with a loss of 82.29 billion The trend continued into the first half of 2010, where TRI's parent company reported a loss of nearly 40 billion, yet the consolidated financial statements showed a profit of nearly 42 billion, attributed to the transfer of financial investments in subsidiaries Tribeco Binh Duong and Northern Tribeco on June 30.
In just three years, TRI's financial journey resembled a perplexing film, leaving investors uncertain about their next steps Ultimately, this narrative concluded with TRI's delisting on April 9, 2012, marking a somber chapter for stakeholders.
Therefore, getting the knowledge of earnings number and underlying of that number is the need for researchers and the investors either in the emerging market as Vietnam stock market.
Research questions
The quality of earnings reported by firms listed on the Vietnam stock market raises important questions regarding the accuracy of stock prices in reflecting this financial information By addressing these inquiries, we can gain valuable insights into the market dynamics and enhance our understanding of the Vietnam stock market.
It can be interesting and useful to set up short and long investment strategies The research questions are as followed:
How is the earnings’ quality of listed firms in Vietnam stock market?
Which components of earning play the major role to contribute to net income?
Do investors use information of earnings quality to apply for their investment action?
Purpose of study
The objectives of the research are:
- To figure out the quality of earnings of listed firms in Vietnam stock market;
- To find out which part of earnings is major contribution to earnings;
- To find out how investors react toward the information of earnings and toward the information of components of earnings;
- To suggest some implications to participants in Vietnam stock market, especially researcher, investors and policy makers.
Structure of the thesis
Chapter Two provides an overview of the Vietnam stock market, exploring existing literature on earnings quality, cash flow, and accruals It also examines the concepts of random walk and market efficiency, which serve as foundational elements for evaluating the two hypotheses under investigation.
Chapter Three: I focus on the theoretical and statistical methodology I then explain how I approached the research and present the process for measuring the two hypotheses based on the literature.
In Chapter Four, I outline the steps for analyzing hypotheses and presenting the results of tested regressions, revealing evidence that supports my predictions regarding the persistence of earnings Additionally, I uncover intriguing findings from the pricing equation that enhance our understanding of the data.
Chapters Five and Six encapsulate the essential findings and strategic conclusions drawn from the thesis, while also offering recommendations for future research and a self-evaluation of the study conducted.
Figure 2.1 Vietnam's inflation - Source : World Bank*
Vietnam Stock Market
Vietnam's economy is steadily developing, focusing on GDP growth and inflation control The inflation rates peaked at 22.7% in 2008 and 21.3% in 2011 However, recent monetary policy tightening has successfully cooled the economy, resulting in a significant decrease in inflation to 4.8% by 2013 (World Bank 1).
To control the inflation into single digits, stabilize the macro economics, and to grow the stock market are among the priority goals of Vietnam.
Vietnam’s stock market capitalization represented nearly 23% of GDP in
2013, it is a low market cap/ GDP 2 relative to ASEAN nations This is a positive sign for the economy and suggests that the stock market still has strong
1 Vietnam’s inflation data is obtained at http://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG
The Ministry of Finance is set to revise several security decrees and circulars to enhance the legal framework of the local stock market, aiming to attract increased foreign investment These changes are expected to boost market liquidity by permitting investors to open multiple transaction accounts and enabling them to buy and sell the same stock within a single trading session.
Vietnam’s overall Price/Earning ratio 3 is relatively low — just over 12 as of December, 2013 It is below in relative with Asian nations such as Thailand (14.59), and Indonesia (19,72) etc.
Vietnam hosts two large stock exchanges; the Ho Chi Minh City Stock Exchange (HOSE), the Vietnam's largest stock exchange, and the Hanoi Stock Exchange (HNX).
Figure 2.3 Price/Earnings ratio – Source: Bloomberg
Established in 2000, HOSE currently lists 301 companies as of December
The Ho Chi Minh City Stock Exchange (HOSE), formerly known as the Ho Chi Minh City Securities Trading Center (HoSTC), was officially inaugurated on July 20, 2000, with trading beginning shortly after on July 28, 2000 The exchange started with two listed companies: Refrigeration Electrical Engineering Joint Stock Corporation (REE) and Saigon Cable.
The Telecommunication Material Joint Stock Company (SACOM) initially faced foreign ownership limits of 20% for equities and 40% for bonds However, in July 2003, the government increased the equity limit to 30% and eliminated restrictions on foreign ownership of bonds to enhance liquidity Subsequently, on August 8, 2007, the Ho Chi Minh Securities Trading Center (HoSTC) was renamed and upgraded to the Ho Chi Minh Stock Exchange.
The Hanoi Stock Exchange (HNX), established in March 2005, was formerly known as the Hanoi Securities Trading Center (Hanoi STC) It plays a crucial role in facilitating the auction and trading of stocks and bonds in Vietnam.
2009 It was the second security trading center to open in Vietnam after Ho Chi
Figure 2.4 Number of listed companies – Source: HSX and HNX
Minh City Securities Trading Center The HNX hosts 377 companies by the end of December 2013.
Over the past 13 years, the Vietnamese market has experienced significant changes and volatility Notably, between 2000 and 2003, the market saw strong growth, with the VN-Index reaching a peak of 571.04 points on June 25.
From 2001 to 2003, the VN-Index experienced a significant downtrend, dropping from 203.12 points on October 5, 2001, to a low of 139.64 points by April 1, 2003, with the lowest point recorded at 180.73 on March 11, 2002 In the subsequent period from 2004 to 2005, the index fluctuated between 213.4 and 307.05 points, reaching its peak of 307.05 points on December 6, 2004.
30, 2005) In the period 2006-2009, VN-Index reached to top on Feb 02 2007 at1167.36 points before financial crisis The lowest level felt on Feb 24, 2009 at 235.5 points Index was at 504.63 on Dec 31, 2013.
Figure 2.5 VN-index history data – Source: VNDIRECT company
Theoretical framework
Market efficiency
Numerous researchers have examined the concept of the "efficient market," which plays a significant role in financial theory This article delves into its implications and perspectives as highlighted in the existing literature.
Market efficiency, as discussed by Haugen A (2001), refers to the speed at which market participants become aware of new information regarding a company and subsequently adjust their buying or selling of its securities A market is considered efficient if the prices of these securities quickly reflect all relevant new information.
An efficient market is characterized by the rapid adjustment of stock prices in response to new information, ensuring that prices fully reflect all available data Research on efficient market theory has primarily focused on assessing how well prices incorporate specific subsets of this information (Fama et al., 1969).
In an efficient market, as defined by Pettit, current prices accurately and impartially reflect all publicly available information, including dividend announcements and security performance This means that the expected return from a security in any given period is not influenced by past information, as stock prices already incorporate the impact of such data.
The market's efficiency lies on a spectrum, prompting an analysis of how effectively it incorporates information into stock prices Haugen A (2001) categorized information into three distinct groups related to different forms of market hypothesis The first group includes all "knowable" information pertinent to a stock's valuation, encompassing publicly accessible details about the company, its industry, and macroeconomic factors The second group consists of publicly announced information, such as accounting reports and economic indicators, which are critical for firm valuation Lastly, the third group pertains to insights derived from analyzing historical market prices of the stock, highlighting the various dimensions through which information influences market efficiency.
Random walk
An efficient market operates on the principle of randomness, where future price movements cannot be forecasted based on historical data, as stated by G Burton (1999) This concept, known as a random walk, suggests that short-term fluctuations in stock prices are inherently unpredictable Consequently, traditional methods such as technical analysis, earnings forecasts, and chart analysis are deemed ineffective under the random walk hypothesis, according to Burton.
G.Burton (1999) argued that ―if the flow of information is unimpeded, then tomorrow’s price change in speculative markets will reflect only tomorrow’s
The concept of "news" is inherently unpredictable, leading to equally unpredictable and random price changes in the stock market The "random walk" theory suggests that stock price fluctuations occur independently of past prices, indicating that investment returns are serially independent Early empirical studies on the random walk hypothesis revealed that stock price changes over time are largely independent and unrelated, with their probability distributions remaining constant throughout.
Investors consistently strive to predict future stock prices for optimal buying and selling decisions, primarily using two methods: technical and fundamental analysis Fundamental analysis focuses on estimating a stock's intrinsic value based on firm-foundation theory, while technical analysis involves interpreting stock charts, emphasizing past price movements and trading volume to forecast future trends Chartists argue that market behavior is driven by 90% psychology and only 10% logic, in contrast to fundamental analysts who believe the market operates 90% on logical principles and just 10% on psychological factors.
Many investors argue that the stock market rapidly and accurately incorporates new information, suggesting that amateur traders can perform as well as professionals However, this perspective is contested by numerous financial advisers, portfolio managers, and researchers who advocate for the non-random walk theory The existence or absence of a random walk significantly impacts researchers, investors, trading strategies, portfolio management, asset pricing models, and ultimately, financial and economic development.
Despite advancements in accounting theories, contradictory studies on anomalies persist Over the past two decades, extensive research has examined the relationship between accounting earnings and stock returns Findings reveal that stock prices often do not fully incorporate the information embedded in earnings, as well as the accrual and cash flow components Most of these studies have primarily focused on the US market.
The validity of the "random walk" theory in emerging markets like Vietnam raises questions, particularly regarding the influence of earnings information on stock prices Unlike the United States markets, it remains unclear whether earnings and their components significantly affect share prices in the Vietnamese stock market Research on the relationship between earnings, earnings components, and stock prices in Vietnam is still limited.
Prior empirical studies
Cash flows and accruals information in earnings
Capital market researchers have explored whether cash flows or accrual components enhance or diminish the effectiveness of earnings in assessing firm performance Key studies have investigated the extent to which stock prices accurately represent a firm's economic performance based on earnings information.
Early studies investigated the informational value of accruals, with Ball and Brown (1968) demonstrating that the correlation between security returns and earnings surpasses that between security returns and operating cash flows This implies that accruals enhance the effectiveness of accounting income in representing a firm's performance, as the disparity between earnings and cash flows is attributed to accruals.
Research by Wilson (1986) , Rayburn (1986 ), Bowen et al (1986),Wilson
(1986), Bernard and Skinner (1996 ) and Livnat and Zarowin (1990) showed that the accrual and cash flow components of earnings have information content in evaluating earnings.
(1994) extends this previous research by allowing for nonlinear relations between returns and the performance variables earning, accruals and cash flows Ali
(1994) shows nonlinear relations between returns and earning, accruals and cash flows.
Research by Dechow (1994) indicates that cash flows and accruals are critical measures of firm performance, positing that both components of earnings provide similar forecasting insights However, Sloan (1996) disputes this notion, arguing that accruals are generally less informative and reliable than cash flows His findings reveal that accruals have lower persistence in predicting future earnings compared to cash flows Despite this, stock prices fail to fully incorporate the information contained in both accruals and cash flows regarding future earnings.
The research discussed up till now examines whether cash flows and accruals are significant in a regression where abnormal stock returns are the dependent variable.
Definition of earnings quality
Financial reporting aims to deliver valuable information for business and investment decision-making The quality of these reports is crucial for users involved in contracts and investment choices A key aspect of financial reporting is earnings quality, which significantly contributes to the overall quality of financial reporting.
(1989) see quality as the characteristic of earnings and studies following Lev
Research on earnings quality is essential for equity valuation, with various definitions emerging in the literature A common perspective is that the persistence of earnings serves as a key indicator of earnings quality, reflecting a company's ability to sustain profits over the long term Sloan (1996) is recognized as a pioneer in this area, with subsequent studies supporting his findings Notable contributions include Beneish and Vargus (2002), who define earnings quality through persistence, and Scott A Richardson et al (2001), Li et al (2011), and Richardson (2005), who focus on the persistence of accruals as a measure of quality Ahmed et al (1999) and Lev and Nissim (2004) also emphasize earnings persistence, while Hanlon (2005) highlights its role in inferring earnings quality Several survey papers on earnings quality, including those by Healy et al (1999) and Dechow and Skinner (2000), further enrich the discourse on this topic.
Persistent earnings are often referred to as sustainable or core earnings, where sustainable earnings are considered high quality earnings Penman and Zhang
(2002) for instance define earnings quality:
High-quality earnings are those that reliably indicate future performance, often referred to as "sustainable earnings." Conversely, when accounting practices lead to unsustainable earnings, these are classified as poor-quality earnings.
In this research, when earnings quality is mentioned, it will be understood that earning persistence as implication of earnings quality.
Measuring earning quality
In finance research, various constructs are utilized to assess earnings quality, with one prominent approach focusing on the time series properties of earnings, as highlighted by Kormendi and others.
Lipe (1987), Sloan (1996)), in another word, it is earnings persistence.
Persistent earnings are associated with investor responses to reported earnings Earnings persistence is a value relevant characteristic of earnings as made explicit in the Feltham and Ohlson (1995) valuation model.
The finance literature often posits that earnings follow a "random walk" model, indicating that changes in earnings are unpredictable However, Freeman et al (1982) challenge this notion by demonstrating that current book rate-of-return can effectively predict future earnings changes A low rate-of-return suggests that earnings are "temporarily depressed," while a high rate-of-return indicates "unusually good" earnings Their findings imply that the "random walk hypothesis" is not as robust as previously thought, as past earnings information can be utilized to predict future earnings, suggesting that earnings are indeed predictable.
Ou and Penman (1989) enhance the understanding of future earnings by demonstrating that various financial statement items, not just return-on-assets, play a crucial role in their determination They propose a financial statement analysis method that extracts relevant figures, serving as indicators for future earnings trends This indicates that a thorough analysis of financial statements can effectively predict future earnings.
Kormendi and Lipe (1987) analyze earnings persistence by employing firm-level regressions that relate current earnings to the previous year's earnings Their methodology involves estimating slope-coefficient estimates to quantify this persistence, utilizing a specific equation for their analysis.
Earn(j,t) : Firm’s net income in year t; and
Earn(j,t-1) : Firm’s net income in year t-1
Earnings persistence is measured by the slope coefficient (δ1), where a value close to one or greater indicates highly persistent earnings, signifying higher quality Conversely, values near zero suggest highly transitory earnings, which are considered lower quality.
Sloan (1996) examines the distinct implications of cash flow from operations and accruals on the persistence of future earnings His research focuses on the effectiveness of earnings and their components in predicting future earnings Typically, to assess persistence, researchers conduct a regression analysis that correlates the current value of a variable with its future value, as noted by Dechow et al (2006) and Richardson (2005).
Link between earnings persistence and market pricing
An important question to analyst is how investors behave with information of future earnings by pricing equities in stock market Follow up with Dechow et al.
(2010), the empirical evidence is mixed in the literature:
Higher persistence in earnings is linked to increased equity market valuations, leading to positive returns in the stock market Research by Collins and Kothari (1989), Kormendi and Lipe (1987), and Easton and Zmijewski (1989) supports the notion that more stable earnings result in a stronger response in stock prices.
The second prediction investigates whether investors recognize the varying contributions of different components to earnings persistence Sloan (1996) found that investors often overlook the distinct persistence levels between accrual and cash flow components of earnings Subsequent studies, including those by Scott A Richardson et al (2001), Richardson (2005), and Dechow et al (2006), have further supported Sloan's findings, providing additional evidence of this investor oversight.
At this date, and to the best of my knowledge, there are not many published papers investigating the relationship between earnings quality and stock return inVietnam context.
Chapter two presents an appealing overview of the Vietnamese stock market, highlighting its low inflation rate, attractive price-to-earnings ratios compared to other ASEAN countries, and the ongoing development of securities regulations and laws.
This chapter examines literature demonstrating the informative nature of cash flow and accruals in relation to earnings It defines earnings quality and discusses its measurement Additionally, it reviews the concepts of random walk and market efficiency, which serve as a foundation for assessing the two tested hypotheses.
Hypotheses Development
Analyzing the components of earnings is crucial for financial statement analysis, as highlighted by Dechow (1994), who asserts that earnings serve as a reliable indicator of a firm's performance Dechow's research further reveals that the components of earnings, specifically cash flow and accruals, are effective predictors of future earnings Building on this foundation, Sloan (1996) demonstrates that the cash flow component of earnings exhibits greater persistence compared to the accrual component, leading to the formulation of the first testable hypothesis.
Hypothesis H1: Earnings of listed companies in Vietnam stock market are contributed from cash flows are persistent than earnings that are contributed from accruals.
Sloan (1996) highlights that investors tend to overvalue the accrual component of earnings while undervaluing the cash flow component, primarily due to their focus on reported earnings and inability to recognize the varying levels of persistence between these components Consequently, I predict that investors overlook the distinct persistence characteristics of cash flows and accruals, leading to mispricing in the market.
Hypothesis H2: Stock prices in Vietnam stock market response differently with contribution of cash flow component and accruals component to earnings.
Figure 3.1 The Framework for the Hypothesis 1
Figure 3.2 The Framework for the Hypothesis 2
Hypothesis testing framework
This article focuses on assessing earnings persistence by analyzing the relationship between future earnings, cash flows, and the accrual components of current earnings Through this examination, the study aims to determine the quality of earnings.
The second phase of my research focuses on market efficiency theory, particularly the "random walk" model, to examine if the market can predict the varying impacts of cash flow and accruals on earnings This leads to the second hypothesis, which posits that stock prices react differently to the contributions from these two earnings components.
Theoretical Methodology
Design
Choosing an appropriate research methodology involves several key factors, beginning with a thorough literature review to establish a foundational understanding of the field and the specific area of interest The research topic and question significantly influence the selection of methodology, as they serve as primary drivers in the decision-making process According to Creswell (2009), research designs encompass the plans and procedures that guide researchers from broad assumptions to detailed methods of data collection, analysis, and interpretation, making the choice of design a crucial step in effective research planning.
Research design is a strategic plan for gathering evidence to address a specific research question, encompassing seven primary types: document analysis, secondary data analysis (like census data), naturalistic observation, surveys, interviews, experiments (including quasi-experiments), and participant observation The core of this framework lies in the specific research methods chosen for data collection, analysis, and interpretation Both quantitative and qualitative techniques can be applied across these designs, allowing for diverse forms of evidence to be produced The selection of methods is influenced by the desired type of information to be collected.
Research design encompasses three main technical approaches: qualitative, quantitative, and mixed methods (Creswell, 2009) Quantitative research is typically characterized by a logical framework where theories guide researchers in formulating hypotheses based on general theories (Alan, 1988) Each research design has its unique strengths and weaknesses, and the choice of design is influenced by the researcher's objectives and available resources, particularly time.
The method I selected for my research issue is quantitative method Since
Quantitative research involves the deductive application of theory, typically presented early in the study proposal, with the goal of testing or verifying existing theories rather than developing new ones Researchers formulate specific hypotheses, collect measurable data, and analyze it using statistical methods to confirm or refute these hypotheses This approach focuses on examining the relationships among variables, providing a structured framework for objective analysis (Creswell, 2009).
Choosing a design is closely linked to the research subject, and my research philosophy is rooted in positivism This approach relies on extensive data analysis, calculations, and statistical tests to draw conclusions Prior to conducting research, it is essential to establish a scientific approach, which generally falls into two categories: deductive and inductive methods.
In deductive hypothesis testing, researchers can formulate new hypotheses based on existing theories or re-evaluate hypotheses from historical studies They test these hypotheses in either the same or different environments across various time periods to determine their validity, ultimately seeking support or rejection of these hypotheses.
When utilizing a deductive approach, researchers rely on existing theories to guide their empirical studies In contrast, an inductive approach involves analyzing data from previous models to formulate new theories The following figure illustrates the structure of the research process.
Figure 3.3 The Logical Structure of the Quantitative Research Process ( ))
Utilizing a deductive approach, I examined established theories and historical research from other markets, particularly the United States, to inform my analysis I adopted their methodologies and re-evaluated these theories using data from the Vietnamese market, focusing on the theory of market efficiency My objective is to determine whether these theories hold true in the context of the Vietnam stock market, which implies that if the market is efficient, investors behave rationally based on available earnings information Consequently, I chose a quantitative design that incorporates empirical data observation to provide evidence supporting my hypothesis.
Data Collection
In research, data can be categorized into two types: primary and secondary data Researchers may choose to utilize only secondary data or a combination of both types, employing various techniques for collection based on quantitative or qualitative methods Secondary data, which is not confined to research alone, is sourced from diverse materials such as statistical office documents, research survey reports, economic bulletins, news articles, scientific journals, and databases.
This chapter on the Vietnam stock market is primarily based on data gathered from the official Vietnamese website, along with various secondary sources referenced throughout the text.
The methods and testing section of an article is crucial as it outlines the process for testing hypotheses and gathering the necessary raw data related to the research questions Prior to conducting tests, multiple analysis and calculation steps are essential, which will be detailed in the subsequent chapters.
Accessing the worldwide web database provides a wealth of resources for my research, including valuable books and numerous relevant scientific articles and journals, which are essential for building a solid theoretical framework.
I have searched are as follows: earnings quality, abnormal return, cash flows and accruals components, Vietnam stock market, and many famous historical researchers in this sector as Sloan, Dechow, etc.
The study utilizes data from Vietnam, specifically financial statement and stock return information sourced from the Bloomberg terminal, covering all firm-years from 2007 to 2013 To maintain consistency with previous research, banking, financial, and insurance institutions are excluded due to the ambiguous distinction between operating and investing activities in these sectors Additionally, firm-year observations with insufficient data during the research period are also omitted.
These criteria yield final sample sizes of 1,470 firm-year observations including 245 tickers within six years from 2007 to 2013.
Variables computation
My measuring is motivated by Sloan (1996) but solve some potential shortcomings of his accruals definition and measurements.
Accruals, as defined by Sloan (1996), represent the difference between net income and cash flow from operating activities, excluding investing and financing cash flows Furthermore, Scott A Richardson et al (2001) indicate that there is no definitive evidence to suggest that accruals associated with investment cash flows are more or less reliable than those linked to operating cash flows.
Sloan (1996) measures current accruals based on balance sheet data, but Hribar and Collins (2002) highlight that this method can lead to inaccuracies in accrual measurement.
To eliminate these shortcomings, I obtain the definition of accruals is total net accruals This is calculated as the difference between earnings and free cash flows (FCF).
Total Net Accruals = Net Income – FCF
In my study, I define Free Cash Flow (FCF) based on the definition provided by Dechow et al (2006), which states that FCF is the sum of Cash Flow from Operations (CFO) and Cash Flow from Investing activities (CFI), as detailed in the statement of cash flows.
Cash flow (CF) = CFO+CFI
To analyze earnings quality across a wide range of firms, I standardize all measures by scaling earnings, accruals, and cash flows against average total assets Consequently, any references to earnings, accruals, or cash flows in this analysis will pertain to these scaled figures.
Average total asset (ATA) = ( BEG + END)/2
My analysis of abnormal stock returns utilizes monthly data from the Bloomberg terminal, measuring returns through buy-hold size-adjusted metrics that include dividends and other distributions The calculation of these returns begins four months after the fiscal year-end, allowing investors to access relevant financial statement information for that fiscal year.
The size-adjusted return is calculated by deducting VNINDEX return, where size is measured as the market capitalization at the beginning of the return accumulation period.
To compute abnormal stock returns (AR), one must determine the difference between the actual performance of a stock or portfolio and its expected return over a specified timeframe This involves calculating the size-adjusted return, which is derived by subtracting the value-weighted average return of firms within the same size-matched decile, with size defined by market capitalization at the start of the return accumulation period Typically, returns are assessed over a twelve-month period, commencing four months after the conclusion of the fiscal year.
Buy-hold return of individual stock:
BHRi : Return of individual stock in portfolio at time t
P t : Price of individual stock in portfolio at time t
P t-1 : Price of individual stock in portfolio at time t-1
Average total asset t Formula Average total asset(ATA) t (ATA) = (
Note: FCF t = CFO t +CFI t (NI t -FCF t )/ATA t
Average total asset for year t
Cash flow t (CF t ) Net income
Cash flow refers to the free cash flows available to a business, while accruals represent the total net accruals, determined by the difference between net income and free cash flows This assessment is calculated over a four-period timeframe to provide a comprehensive understanding of financial performance.
Abnormal stock return (AR t+1 ) Annual buy-hold stock months period after fiscal year-end less the corresponding return of VN- Index.
Buy-hold return of portfolio:
BHRp : Buy-hold return of portfolio at time t
MC i : Market capitalization of individual stock i in portfolio at time t
MC p : Market capitalization of portfolio at time t-1
Testing of hypothesis
Hypothesis H1: Earnings of listed companies in Vietnam stock market are contributed from cash flows are persistent than earnings that are contributed from accruals.
To measure H1, I followed the estimation alternative procedures of Sloan
(1996) Besides, I also studied 20 articles of the former researchers as Dechow et al.
(2006); Richardson (2005) to have the ideas how to measure the hypotheses.
Following Freeman et al (1982), I test equation (1) to find out the relation between future earnings and current earnings:
Test of market efficiency: Ho: α1 = 0; α1 = 1
However, equation (1) implied that the coefficient on the cash flow and accrual component is equal To solve this constraint, I repeat the test of Sloan
(1996) by splitting current earnings into two components : cash flow and accruals. Hypothesis H1 predicts that coefficient of accruals is smaller than the coefficient of cash flow.
Earnings t+1 = γ0 + γ1Accrualst + γ2Cash flow t+ εt+1 ( 2) Ho: γ1 = γ2
Figure 3.4 Steps of Estimation Procedures for Hypothesis 1
Hypothesis H2: Stock prices in Vietnam stock market response differently with contribution of cash flow component and accruals component to earnings.
The aim of my research is to examine if stock prices accurately represent the varying impacts of cash flow and accruals on future earnings Utilizing Mishkin's (1983) model, which tests rational pricing and market efficiency in macroeconomics, I apply this framework to the financial sector This model posits that security prices align with the objective expectations of earnings derived from historical data.
When applied to earnings, the rational expectations hypothesis will be:
E(earningst+1- earningst+1|ϕt) = 0 (3) Where : ϕt: the information available at t, earningst+1 : earnings for the period t+1
E(earningst+1|ϕt): the objective expectation of earningst+1conditional on ϕt for the period t+1
Where : εt+1 : a disturbance with the property that E(rt+1 – rt+1|ϕt) = 0 t+1: the rational forecast of Xt+1 at time t β : a valuation multiplier
In context of my study, X is earnings and β is the earnings response coefficient From equation (1), equation (3) and equation (4), the efficient-markets condition is presented as equation (5):
Earnings t+1 = α0 + α1 Earnings t + εt+1 ( 1) (rt+1 – rt+1|ϕt) = β(Earnings t+1 - α0 - α1 Earnings t) + νt+1 (5) t+1
The expected return, r, is computed following the procedure I re-write equation (5) as:
When earnings are broken down into cash flow (CF) and accruals (ACC), the forecasting and pricing equations become:
Market efficiency imposes the constraints that γ1 = γ1 *
If the investors do not discriminate the different contribution of cash flow and accrual components, this means the two coefficients are equal γ1 *
Test of market efficiency Ho: γ1 = γ1 *
Figure 3.5 Steps of Estimation Procedures for Hypothesis 2
Statistical Methodology
In statistical methodology, I shall apply the EVIEWS version 8.0 - a computer program used for statistical analysis - to test the hypotheses I would like to present the basic steps in a hypothesis testing generally.
In chapter three, hypotheses H1 and H2 are developed based on the chapter one and chapter two, and then I suggest framework to test the two hypotheses.
In my research, I utilized a quantitative method and a deductive approach, beginning with a comprehensive data collection process that resulted in a final sample of 1,470 firm-year observations across 245 tickers from 2007 to 2013 I then detailed the computation of financial variables, including earnings, cash flow, accruals, and abnormal stock returns Finally, I outlined the steps taken to measure hypotheses H1 and H2.
CHAPTER FOUR: EMPIRICAL ANALYSIS AND RESULTS
Chapter four presents the results, starting with section 4.1, which covers descriptive statistics for earnings decompositions and abnormal stock returns Section 4.2 tests the predictions regarding the persistence coefficients of earnings components, while section 4.3 offers pricing tests that indicate investors grasp the significance of these persistence coefficients.
Descriptive statistic
The empirical analysis begins with an examination of variable statistics and pair-wise correlations for the test variables, as summarized in Table 4.1, which includes 1,175 firm-year observations Panel A presents univariate statistics on earnings components and abnormal stock returns, revealing a positive mean and median for the accrual (ACC) variable, while the free cash flow (FCF) variable shows a negative mean, indicating significant investments by listed firms in the Vietnamese market during the sample period The median total net accruals value stands at 0.0836, contrasting with a negative median for accruals defined by Sloan, attributed to the exclusion of cash flow from financial activities in Sloan's definition Additionally, the mean cash flow component is -0.0168, significantly lower than the mean accruals component of 0.0326, suggesting that earnings during the testing period are primarily driven by accruals rather than cash flows, aligning with prior research findings.
The standard deviations of earnings components, specifically 0.2058 for Accruals (ACC) and 0.1992 for Free Cash Flow (FCF), highlight their significant roles in the overall variation of earnings This data suggests that no single component overwhelmingly influences earnings variability, emphasizing the importance of both ACC and FCF in financial analysis.
Table 4.1 presents descriptive statistics on earnings, the accrual and cash flow components of income, and abnormal stock returns, based on a sample of 1,470 firm-year observations sourced from the VN-Index and Bloomberg terminal during the specified period.
Variables Mean Median Maximum Minimum Std Dev.
Variables ACCt FCFt NIt ARt+1
Panel B of table 4.1 reports the pairwise Pearson correlations among the test variables Consistent with prior analysis Dechow (1994); Scott A Richardson et al.
In 2001, a significant negative correlation of -0.9002 was observed between accruals and cash flows, suggesting that accruals effectively remove transitory components from cash flows when calculating earnings Additionally, accruals showed a negative correlation of -0.0573 with future abnormal stock returns, whereas free cash flow (FCF) demonstrated a positive correlation of 0.0732 with future abnormal stock returns.
Test of Hypothesis 1: Earnings persistence result
Steps for Analyze
Step 1: Estimate persistence rate of earnings: I use regression of future earnings performance on current earnings performance as below formula to estimate persistence rate of earnings:
- Earnings t+1 : rate of earnings on assets at time t +1
- Earnings t : r rate of earnings on assets at time t
- α1 : persistence of rate of returns on assets
Step 2: Estimate persistence rate of earnings after dividing earnings into two components (accruals and cash flow): I repeat process as step 1 with below equation:
- γ1 : persistence of accruals in year t
- γ2 : persistence of cash flow in year t
Result
Tables 4.2 and 4.4 present the H1 test results, with Table 4.2 detailing the findings from estimating equation (1) to assess earnings performance persistence The analysis employs ordinary least squares regression to evaluate this equation, and the first column of results in panel A of Table 3 displays the coefficient parameters for the equation.
(1) α 1 = 0.627, confirming prior findings in Sloan (1996) that current earnings can be the indicator to predict future earnings.
The null hypothesis posits that earnings do not persist in the future (Ho 1: α 1 = 0), but this hypothesis is rejected based on a t-statistic of 30.878, with a significance level of 0.01 This indicates that current earnings are likely to persist into future earnings.
Another null hypothesis is earnings follow a random walk Ho 2 : α 1 =1 is rejected by significance test using Wald-test (Table 4.3) with a t-statistic of -18.342.
To ensure the reliability of the findings, the regression analysis was conducted using decile rankings of the tested variables, as suggested by Sloan (1996), rather than their actual values This ranking system spans seven years, assigning values from 1 (lowest) to 10 (highest) The rank regression results presented in Panel B of Table 4.2 indicate a slightly higher coefficient of α1 at 0.648, reinforcing the robustness of the results obtained in Panel A.
The findings presented in Table 4.2 reinforce the concept of earnings persistence in the Vietnamese stock market, aligning with previous studies The average earnings persistence rate (α1) is calculated at 0.627, indicating that for every 100 VND earned in year t, there is an expected contribution of approximately 62.7 VND in earnings for the following year (t+1).
TABLE 4.2 Ordinary Least Squares regressions analyzing the persistence of the current earnings into the future earnings Sample consists of 1,470 firm-year observations obtained from Bloomberg terminal during period 2007 to 2013
Panel A: Regression using actual values
Panel B: Regression using decile ranking
TABLE 4.3 Wald Test for Ho: α 1 =1 Equation: Earnings t+1 = α 0 + α 1 *Earnings t + ε t ( 1)
Variable Coefficient Std Error t-Statistic Prob. α0 0.026 0.002 11.360 0.000 α1 0.627 0.020 30.878 0.000
Variable Coefficient Std Error t-Statistic Prob. α 0 2.079 0.124 16.714 0.000 α 1 0.648 0.020 32.881 0.000
Test Statistic Value Probability t-statistic -18.342 0.000
Table 4.4 analyzes the persistence of cash flow and accrual components of earnings, supporting hypothesis H1, which posits that accrual components result in less persistent earnings compared to cash flow components The regression results in Panel A indicate that the coefficient for the accrual component (ϒ 1 = 0.570) is lower than that of the cash flow component (ϒ 2 = 0.631), confirming that accrual earnings are indeed less persistent than cash flow earnings.
The null hypothesis, which posits that the contributions of cash flow and accrual components in earnings are equal (Ho: ϒ 1 = ϒ 2), is rejected based on an F-test result of F = 43.283, indicating statistical significance at the 0.01 level Supporting evidence from the rank regression analysis shows that the coefficient for the accrual component (ϒ 1 = 0.727) is less than that of the cash flow component (ϒ 2 = 0.738) This finding aligns with previous studies by Sloan (1996), Fairfield (2003), and Dechow et al (2006), which confirm that the accrual component of earnings is less persistent compared to the cash flow component.
Table 4.6 provides corroborating evidence for my first hypothesis by showing large proportion of cases in which ϒ1 is smaller than ϒ 2
Table 4.4 presents compelling evidence supporting hypothesis H1, indicating that the earnings of listed companies on the Vietnam stock market are more significantly influenced by cash flows than by accruals.
Table 4.4 presents Ordinary Least Squares regressions that examine the persistence of accrual and free cash flow components in earnings The analysis is based on a sample of 1,470 firm-year observations sourced from the VN-Index and Bloomberg terminal over a specified period.
Earnings t+1 = ϒ 0 + ϒ 1 Accruals t + ϒ 2 Cash flow t + v t+1 (2) Panel A: Regression using actual values
Panel B: Regression using decile ranking
Variable Coefficient Std Error t-Statistic Prob. ϒ 0 0.032 0.002 13.920 0.000 ϒ 1 0.570 0.020 28.329 0.000 ϒ 2 0.631 0.021 30.145 0.000
Variable Coefficient Std Error t-Statistic Prob. ϒ0 -2.684 0.411 -6.525 0.000 ϒ 1 0.727 0.038 19.343 0.000 ϒ 2 0.738 0.036 20.476 0.000
TABLE 4.5 Wald test for Equality of coefficient cash flow and accrual Equation: Earnings t+1 = ϒ 0 + ϒ 1 Accruals t + ϒ 2 Cash flow t + v t+1 (2)
Null Hypothesis: ϒ 1 = ϒ 2 using actual value
Null Hypothesis: ϒ 1 = ϒ 2 using decile ranking
Test of Hypothesis 2: Stock return result
Steps for Analyze
Step 1: Estimation of stock price reaction to information of future earnings derived from current earnings: I use system equation nonlinear least square to find out how stock price reflect the implications of current annual earnings for future annual earnings with two equations:
Step 2: Estimation of stock price reaction to information of two components of earnings (accruals and cash flow): I repeat procedure as step 1 with equation (2) and forecasting equation (7) as below:
Result
The second hypothesis examines if stock prices accurately reflect the distinct contributions of accrual and cash flow components in earnings Utilizing the framework established by Mishkin (1983), as referenced by Sloan (1996), the study estimates the actual persistence of various earnings components in relation to stock prices The findings are detailed in Table 4.7, with Panel A presenting results based on the actual financial variable values, while Panel B showcases results derived from decile rankings.
In hypothesis H2, I predict that if investors accurately foresee the persistence of current income, the persistence parameter α 1 * will match the actual persistence parameter α 1 Specifically, the coefficient on earnings in equation (1) is 0.635, whereas the coefficient on earnings in the stock price equation (6) is represented as α 1 *.
The findings of this study reveal that investors tend to underestimate the persistence of income, contrasting with Sloan's research, which indicated that they correctly anticipate it This suggests that stock prices fail to reflect the average persistence of earnings performance.
The null hypothesis of market efficiency is that stock prices correctly anticipate the average persistence of earnings H0: α 1 = α 1 *
Robustness test uses the chi-squared value generated by the Wald test, as well as the p-value associated with
The study utilizes Iterative Weighted Non-linear Least Squares estimation to analyze the stock price reaction to current earnings information regarding future earnings The sample comprises 2,940 firm-year observations collected from the VN-Index and Bloomberg terminal, covering the period from 2007 to 2013.
Earnings t+1 = α 0 + α 1 Earnings t + ε t+1 ( 1) Abnormal return t+1 = β 1 (Earnings t+1 - α 0 - α * Earnings ) + ν
Panel A: Regression using actual values
In Panel B, the regression analysis reveals a chi-squared value of 8.215 with one degree of freedom, as shown in table 6.8 The p-value of 0.0042 is significantly below the common threshold of 0.01, allowing for a strong rejection of the null hypothesis This finding suggests that stock prices fail to accurately reflect the persistence of earnings.
Variable Coefficient Std Error t-Statistic Prob. β 1 1.845 0.162 11.392 0.000 α 1 0.635 0.020 31.444 0.000 α 1 *
Variable Coefficient Std Error t-Statistic Prob.
The findings in panel B of table 4.7 support similar conclusions, indicating that the persistence of earnings is statistically insignificant, as evidenced by the decile rankings showing a coefficient α 1 * of -1.174 This suggests that stock prices do not effectively anticipate the average persistence of earnings.
TABLE 4.8 Wald test for Test of market efficiency Ho: α 1 = α 1*
Equation: Earnings t+1 = α 0 + α 1 Earnings t + ε t ( 1) Abnormal return t+1 = β 1 (Earnings t+1 - α 0 + α 1 * Earnings ) + ν ( 6) t
Null Hypothesis: α 1 = α 1* using actual value
Null Hypothesis: α 1 = α 1* using decile ranking
Table 6.9 reports the results from estimating the system in equations (2) and
In hypothesis H2, I predict that the distinct effects of accrual and cash flow components of current earnings on future earnings will not be evident in stock prices Consequently, the persistence coefficient for the accruals component (γ 1 *) is expected to be greater than that of the cash flow component (γ 2 *).
During the sample period from 2007 to 2013, investors overestimated the persistence of accrual components, as indicated by a coefficient of 0.412, while the coefficient on cash flows, γ 2 *, was 0.395 This finding aligns with my prediction and supports previous research by Sloan (1996) and Dechow et al (2006), highlighting that accrual information is less valuable than cash flow.
The null hypothesis of market efficiency suggests that stock prices should reflect the varying impacts of accrual and cash flow components of current earnings on future earnings, represented as H0: γ1 = γ1*.
The robustness test employs the chi-squared value from the Wald test, revealing a chi-squared statistic of 12.436 with two degrees of freedom, as shown in table 6.10 The associated p-value of 0.002 is below the conventional threshold of 0.05, allowing for the rejection of the null hypothesis This suggests that stock prices do not fully incorporate information from the accrual and cash flow components of earnings.
The study presents an iterative weighted non-linear least squares estimation of how stock prices react to information derived from the accrual and cash flow components of current earnings in relation to future earnings The analysis is based on a sample of 2,940 firm-year observations collected from the VN-Index and Bloomberg terminal, covering the period from 2007 to 2013.
Earnings t+1 = γ 0 + γ 1 Accrualst + γ 2 Cash flow t + ε t+1 ( 2) Abnormal return t+1 = β 2 (Earnings t+1 - γ 0 - γ 1* Accruals t - γ 2* Cash flow t ) + ν t+1 (7)
Panel A: Regression using actual values
Panel B: Regression using decile ranking
Variable Coefficient Std Error t-Statistic Prob. β 2 1.738 0.161 10.760 0.000 γ 1 0.570 0.020 28.329 0.000 γ 1 *
Variable Coefficient Std Error t-Statistic Prob. β 2 0.266 0.0342 7.755 0.000 γ 1 0.795 0.0375 21.166 0.000 γ 1 * -0.857 0.223 -3.828 0.000 γ 2 0.779 0.034 22.295 0.000 γ 2 * -1.299 0.276 -4.700 0.000
TABLE 4.10 Wald test for Test of market efficiency Ho: γ 1 = γ 1* ; γ 2 = γ * 2
Equation: Earnings t+1 = γ 0 + γ 1 Accruals t + γ2Cash flow t + ε t+1 ( 2)
Abnormal return t+1 = β 2 (Earnings t+1 - γ 0 - γ 1* Accruals t - γ 2* Cash flow t ) + ν t (7)
Panel B presents findings based on the decile rankings of financial variables, supporting the earlier conclusion The coefficients γ 1 * and γ 2 * are -1.438 and -0.982, respectively, indicating that investors struggle to differentiate between the varying persistence of accruals and cash flow components within net income.
The findings of this test suggest that investors perceive the accruals component of earnings as more persistent than the cash flows component.
Chapter four is present the result of the two hypotheses in the research.
The analysis of hypothesis 1 was conducted using Ordinary Least Squares regressions to examine the persistence of current earnings into future earnings The findings reveal that 62.7% of current earnings persist in future earnings, providing robust evidence in support of hypothesis H1 This indicates that the earnings of listed companies on the Vietnam stock market are more significantly influenced by cash flows than by accruals.
The second hypothesis test employs a system of equation non-linear regression to analyze how stock prices react to information in the accrual and cash flow components of current earnings concerning future earnings The findings suggest that investors perceive the accruals component as more persistent than the cash flows component in earnings.
Reliability
The reliability is concerned with the consistency of a measurement It concerns to the internal consistency and the measurement’s consistency over time.
It may be understood that the reliability of the test may be evaluated in case of there is a big difference in results between the first and the second test.
This study utilized reliable data sources, including index data from the Vietnam Stock Exchange and daily share prices obtained from the Bloomberg terminal, alongside macroeconomic data such as inflation provided by the World Bank.
The reliability of the study is supported by a substantial sample size of 245 firms, resulting in 1,715 firm-year observations from 2007 to 2013 To ensure the validity of the findings, a test-retest approach is recommended, allowing for the data to be re-evaluated over different periods to assess consistency This presents an opportunity for junior master's students to conduct a re-test of the study, further enhancing the reliability of the results.
To enhance the robustness of my results, I re-compute the accrual variable using data from the statement of cash flows instead of relying solely on balance sheet data, as detailed in the "Variables computation" section.
The probability for a bias could be possible since the data was included in short period from 2007 to 2013, thus, the reliability of the test was possibly reduced.
Validity
Internal validity refers to the extent to which one can confidently assert that variable X causes variable Y (Remenyi et al., 1998) During the initial phases of my research, I meticulously implemented various strategies and methodologies, identifying key research questions, defining the research type, establishing a theoretical framework, and formulating and testing hypotheses However, a significant challenge I encountered was time constraints, as the data collection and analysis process required more time than anticipated to ensure accuracy and minimize errors.
External validity examines the generalizability of a researcher’s findings to a broader context (Remenyi et al., 1998) Numerous pioneers and researchers have explored the efficient market and random walk hypotheses across various countries over the years This study aims to apply these theories and methodologies within the Vietnamese context, providing additional evidence to support previous findings.
Practice Implications
Implication for investors
Despite being established for nearly 13 years, Vietnam's stock market remains relatively new and unfamiliar to many investors, who often lack financial knowledge To mitigate risks and avoid falling victim to misleading information, such as the TRI case mentioned in the introduction, investors should focus more on analyzing a company's financial statements rather than relying on rumors.
Implication for researcher
Researcher can use the persistence earning rate at 62.7% in their earnings forecasting because the ―sustainable‖ earnings that is useful input to Discount CashFlow (DCF)-based equity evaluation.
Implication for policy maker
In Vietnam, some listed companies manipulate their earnings figures to create stock demand and inflate prices or avoid delisting risks According to Circular 52/2012/TT-BTC from the Ministry of Finance, if a company's profit after corporate income tax deviates by 10% or more from the previous year, they are required to explain this discrepancy in their quarterly financial reports However, investors still face risks due to the delayed and obscure nature of such abnormal information Therefore, policymakers need to enforce stricter regulations and impose severe penalties for these deceptive practices.
Further Study 51 References APPENDIX
This study's findings are limited to financial statement analysis, prompting further investigation into whether earning quality is influenced by subjective factors, such as accounting decisions and managerial intentions This concern relates to the concept of earnings manipulation, commonly referred to in academia as earnings management Consequently, future research should explore whether earnings management is employed with the intention of manipulating stock prices.
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Market Cap in % of GDP as of December 2013
1 DRC DANANG RUBBER JS Consumer
4 BGM BAC GIANG EXPLOI Materials
5 BMC BINH DINH MINERA Materials
6 KSA BINH THUAN MINER Materials
7 DTL DAI THIEN LOC Materials
8 DHM DUONG HIEU TRADI Materials
9 FCM FECON MINING JSC Materials
11 HAP HAPACO GROUP JSC Materials
12 HSG HOA SEN GROUP Materials
14 HLA ASIA HUU LIEN JSC Materials
15 LCM LAO CAI MINERAL Materials
16 NKG NAM KIM STEEL JS Materials
17 KSS NA RI HAMICO MIN Materials
19 PTK PHU THINH METALL Materials
20 POM POMINA STEEL COR Materials
21 SMC SMC INV TRADING Materials
22 KTB TAY BAC MINERALS Materials
23 TLH TIEN LEN STEEL C Materials
26 DPR DONG PHU RUBBER Materials
28 HAI HAI AGROCHEM JSC Materials
29 HRC HOA BINH RUBBER Materials
31 PHR PHUOC HOA RUBBER Consumer
33 TRC TAY NINH RUBBER Materials
34 TNC THONG NHAT RUBBE Consumer
35 VFG VIET NAM FUMI Materials
39 BCE BINH DUONG CONST Industrials
41 BMP BINH MINH PLASTI Industrials
42 CYC CHANG YIH CERAMI Industrials
50 DXV DA NANG CONSTRUC Materials
54 DLG DUC LONG GIA LAI Industrials
58 HVX HAI VAN CEMENT Materials
59 CII HO CHI MINH CITY Industrials
60 DHA HOA AN JSC Materials
61 HBC HOA BINH CONSTRU Industrials
62 HLG HOANG LONG GROUP Consumer
63 GTN HOANG NHAT PRODU Consumer
64 HU3 HUD3 INVEST & CO Industrials
65 HTI IDICO INFRA DEVT Industrials
69 LBM LAM DONG BUILDIN Materials
74 NAV NAM VIET JSC Materials
75 NNC NUI NHO STONE JS Materials
79 PTC POST AND TELECOM Industrials
81 SHI SON HA INTERNATI Industrials
82 SBA SONG BA JSC Utilities
83 SJS SONGDA URBAN & I Real estate
85 THG TIEN GIANG INV Industrials
88 VSI WATER SUPPLY SEW Industrials
90 AGM AN GIANG IMPORT- Consumer
92 ABT BENTRE AQUA PROD Consumer
94 BHS BIEN HOA SUGAR Consumer
96 SCD CHUONG DUONG BEV Consumer
97 ACL CUULONG FISH JSC Consumer
99 HVG HUNG VUONG CORP Consumer
100 IDI INTL DEV & INV Consumer
102 KDC KINH DO CORP Consumer
103 LSS LAM SON SUGAR JS Consumer
106 MPC MINH PHU SEAFOOD Consumer
107 ANV NAM VIET CORP Consumer
108 NSC NATIONAL SEED JS Consumer
109 NHS NINH HOA SUGAR Consumer
111 FMC SAO TA FOODS JSC Consumer
113 SSC SOUTHERN SEED CO Consumer
114 SPM SPM CORP Health Care
116 SBT THANH THANH CONG Consumer
117 TNA THIEN NAM TRADIN Consumer
118 TAC TUONG AN VEGETAB Consumer
119 VNH VIET NHAT SEAFOO Consumer
120 VTF VIET THANG FEED Consumer
121 VNM VIET NAM DAIRY P Consumer
123 VHC VINH HOAN CORP Consumer
124 VLF VINH LONG CEREAL Consumer
125 DCL CUU LONG PHARMA Health Care
126 DHG DHG PHARMACEUTIC Health Care
127 DMC DOMESCO MEDICAL Health Care
128 IMP IMEXPHARM PHARMA Health Care
129 JVC JAP VIET MED INS Health Care
130 OPC OPC PHARMA Health Care
132 VMD VIMEDIMEX MEDI-P Health Care
133 ALP ALPHANAM INVESTMENT Health Care
134 APC AN PHU IRRADIATI Industrials
135 BRC BEN THANH RUBBER Industrials
136 SVI BIEN HOA PACKAGI Materials
138 CMV CAMAU TRADING JS Consumer
139 CLL CAT LAI PORT JSC Industrials
141 DVP DINH VU PORT Industrials
142 DTT DO THANH TECHNOL Materials
143 PDN DONG NAI PORT JS Industrials
144 PAC DRY CELL & STORA Industrials
147 HTV HA TIEN TRANSPOR Industrials
149 HPG HOA PHAT GRP JSC Materials
151 GSP INTL GAS PDT SHP Energy
152 LGC CII BRIDGES & RO Industrials
154 MCP MY CHAU PRINTING Materials
155 PAN PAN PACIFIC CORP Industrials
161 SBC SAIGON BEER TRANSPORTATION Industrials
163 SFI SEA AND AIR FREI Industrials
167 TIX TAN BINH IMPORT Financials
168 TPC TAN DAI HUNG PLA Materials
169 TTP TAN TIEN PLASTIC Materials
171 TYA TAYA VIETNAM ELE Industrials
173 EMC THU DUC ELECTRO Industrials
176 HTL TRUONG LONG ENG Consumer
177 VPK VEGETABLE OIL PA Materials
178 VOS VIET NAM OCEAN S Industrials
VIET NAM SEA TRANSPORT AND
186 ASP AN PHA PETROLEUM Energy
190 SFC SAIGON FUEL JSC Consumer
192 DQC DIEN QUANG JSC Industrials
193 GDT DUC THANH WOOD P Consumer
195 HAG HAGL JSC Real estate
203 TCM THANH CONG TEXTI Consumer
204 GTA THUAN AN WOOD PR Materials
205 TTF TRUONG THANG FUR Consumer
206 VPH VAN PHAT HUNG Real estate
209 HAX HANG XANH MOTORS Consumer
211 PNJ PHU NHUAN JEWELR Consumer
212 PNC PHUONG NAM CULTU Industrials
214 SVT SAIGON VIEN DONG Consumer
215 TLG THIEN LONG GROUP Industrials
219 MWG MOBILE WORLD INV Consumer
221 ST8 SIEU THANH JSC Industrials
223 DSN DAM SEN WATER PA Consumer
224 HOT HOI AN TOURIST Consumer
227 GTT THUAN THAO CORP Industrials
228 VNG VIETNAM GOLF TOU Consumer
229 VNS VIETNAM SUN CORP Industrials
231 SJD CAN DON HYDRO PO Utilities
232 CLW CHO LON WASUCO Utilities
233 CNG CNG VIETNAM JSC Energy
234 SEC GIA LAI CANE SUG Consumer
235 DRL HYDRO POWER JSC Utilities
236 KHP KHANH HOA POWER Utilities
237 MTG MT GAS JSC Utilities
239 PPC PHA LAI THERMAL Utilities
241 TIC TAY NGUYEN ELECT Utilities
242 TBC THAC BA HYDROPOW Utilities
243 TMP THAC MO HYDROPOW Utilities
244 TDW THU DUC WATER Utilities
245 VSH VINH SON - SONG HINH Utilities