Ownership ratio of foreign investors to be raised to 49pct

VNStockNews.com - The government is considering issuing many new policies for foreign investment attraction into Vietnam's finance sector, a governmental official spoke at the conference "Vietnam Capital and Finance Market 2009" held yesterday in Hanoi by Euromoney magazine.

The official said that the government will raise the ownership ratio of foreign investors in public companies to the maximum level of 30-49 percent of chartered capital of local firms. As for member funds, the holding of foreign investors will be no limit and SBV will allow the setting up of foreign wholly invested member funds.

Now, the foreign holding at local securities brokerages is considered being lifted to 49 percent. From 2012, foreign investors would be able to own 100 percent chartered capital of domestic trading institutions.

According to the official, Vietnamese government plans to remove the tax on profit transference of foreigners to their homeland and allow joint venture companies and foreign 100 percent invested companies to transform operation into the joint stock company model, issue shares for capital increase and list on the stock market. At present, Ministry of Finance is drafting and guiding regulations relating to merger and liquidation, bankruptcy of securities companies.

The government also will restructure stock market by enhancing the transparency of companies, change securities exchanges to limited one member companies, issuing guidance circular on deposit transaction and repo. The circular allows investors to open many accounts at difference brokerages or extend the transaction time.

Director of Hanoi Stock Exchange (HNX), Tran Van Dung said that the equitisation and securities supply will increase rapidly in the near future. The government plans to allow state enterprises to sell strategic partners before equitisation.

Statistics from State Securities Commission (SSC) showed that the Vietnamese stock market reached total capitalisation of $38 billion, accounting for 5 percent of GDP. To date, FII inflow to the stock market has attained $7.6 billion. In first half of 2009, the foreign investment flow to Vietnamese stock market hit $628 million. Vietnam has total 10,000 securities trading accounts of foreign investors, including over 1,000 of institutional investors.