Vietnam to allow 60% foreign stakes in firms

Reading Time: 2 minutes

stock tradersVietnam’s prime minister is expected within days to approve an amended law allowing foreigners to own up to 60 per cent of shares in some listed firms, the latest incremental move towards easing tight state controls on the economy, Reuters reported.

The draft would increase the foreign ownership limit and voting rights from 49 per cent to 60 per cent, but only in certain sectors and companies, and after approval of shareholders and Prime Minister Nguyen Tan Dung himself.

The proposal also increases the foreign voting rights percentage in unlisted companies to 49 per cent, to match the current 49 per cent foreign shareholding limit.

Investors have welcomed the idea as a positive step towards bringing more capital into Vietnam’s two bourses, but say the law needs to be loosened further if the country is serious about attracting investment and boosting the performance of its companies.

The main stock exchange in Ho Chi Minh City has climbed 21 per cent this year, the best performer in Southeast Asia and fourth in Asia. However, it is still down 57 per cent from its peak in March 2007 and only a minor player in the region with a market capitalisation of $40 billion, an eighth the size of Thailand and a tenth of Singapore.

Vietnam’s government has promised reforms as part of a “master plan” aimed at reviving an economy once seen as Asia’s next emerging-market star, but one hit badly by high levels of toxic debt, scant retail spending and a startling number of bankruptcies of small and medium-sized private companies.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

Reading Time: 2 minutes

Vietnam’s prime minister is expected within days to approve an amended law allowing foreigners to own up to 60 per cent of shares in some listed firms, the latest incremental move towards easing tight state controls on the economy, Reuters reported.

Reading Time: 2 minutes

stock tradersVietnam’s prime minister is expected within days to approve an amended law allowing foreigners to own up to 60 per cent of shares in some listed firms, the latest incremental move towards easing tight state controls on the economy, Reuters reported.

The draft would increase the foreign ownership limit and voting rights from 49 per cent to 60 per cent, but only in certain sectors and companies, and after approval of shareholders and Prime Minister Nguyen Tan Dung himself.

The proposal also increases the foreign voting rights percentage in unlisted companies to 49 per cent, to match the current 49 per cent foreign shareholding limit.

Investors have welcomed the idea as a positive step towards bringing more capital into Vietnam’s two bourses, but say the law needs to be loosened further if the country is serious about attracting investment and boosting the performance of its companies.

The main stock exchange in Ho Chi Minh City has climbed 21 per cent this year, the best performer in Southeast Asia and fourth in Asia. However, it is still down 57 per cent from its peak in March 2007 and only a minor player in the region with a market capitalisation of $40 billion, an eighth the size of Thailand and a tenth of Singapore.

Vietnam’s government has promised reforms as part of a “master plan” aimed at reviving an economy once seen as Asia’s next emerging-market star, but one hit badly by high levels of toxic debt, scant retail spending and a startling number of bankruptcies of small and medium-sized private companies.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid