Viet­nam to end for­eign in­vest­ment lim­its for some com­pa­nies

The China Post - - LIFE GUIDE POST -

Viet­nam said Sun­day it will end re­stric­tions lim­it­ing the stake for­eign­ers can own in some lo­cally listed com­pa­nies, the latest move by the com­mu­nist coun­try to open up to over­seas in­vest­ments.

In a de­cree posted on the gov­ern­ment’s web­site, Hanoi said it planned to scrap rules cur­rently for­bid­ding for­eign­ers from own­ing more than 49 per­cent of a com­pany.

“For (some) public com­pa­nies ... the per­cent­age of for­eign own­er­ship is un­re­stricted, un­less the com­pany’s char­ter stip­u­lates oth­er­wise,” the de­cree said.

Viet­nam’s econ­omy grew by 6.28 per­cent in the first half of this year, rac­ing along at its fastest rate since 2008, of­fi­cial fig­ures re­leased last week showed.

But it re­mains dom­i­nated by huge and of­ten scle­rotic sta­te­owned en­ter­prises.

Hanoi is cur­rently in the process of eas­ing busi­ness reg­u­la­tions and a long-run­ning pri­va­ti­za­tion drive, which the gov­ern­ment hopes will keep sup­port­ing eco­nomic growth.

The de­cree does not clearly state when the re­stric­tions will be lifted, al­low­ing for­eign­ers to take com­plete con­trol of af­fected com­pa­nies, or give de­tails or how many or what type of firms will be ex­empt.

An­a­lysts cau­tiously wel­comed the an­nounce­ment, say­ing for­eign com- pa­nies and in­di­vid­u­als would likely jump on an op­por­tu­nity to fur­ther in­vest in the boom­ing South­east Asian na­tion.

“It is good de­ci­sion made at the right time,” Le Dang Doanh, a prom­i­nent economist and one of the ar­chi­tects of the coun­try’s re­forms, told AFP.

“For­eign in­vestors could bring more money and cap­i­tal to the Viet­namese stock mar­ket, which could be­come more ac­tive in the fu­ture. The de­cree will also en­cour­age Viet­namese com­pa­nies to pay at­ten­tion in a more com­pet­i­tive mar­ket.”

The Bloomberg news agency said there are be­lieved to be around 30 Viet­namese com­pa­nies where for- eign own­er­ship is cur­rently al­ready at the 49 per­cent thresh­old, quot­ing Hanoi based VNDirect Se­cu­ri­ties JSC.

“As soon as the lim­its are raised, you will see a rush to buy in the blue chips,” Pa­trick Mitchell, the head of in­sti­tu­tional sales at Vi­naSe­cu­ri­ties JSC, told Bloomberg.

Data com­piled by Bloomberg es­ti­mates over­seas in­vest­ments in Viet­namese stocks have reached US$135.6 mil­lion in 2015 through June 25, head­ing for the ninth straight year of pur­chases.

The na­tion’s stocks are val­ued at US$58.6 bil­lion, com­pared with US$558.1 bil­lion in Sin­ga­pore, the re­gion’s largest mar­ket.

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