SSC tells foreign investors that increases to foreign ownership ceiling still some way off.
Foreign investors seeking a larger foreign ownership ratio will have to wait for the time being, Mr. Vu Bang, Chairman of the State Securities Commission (SSC), told the Vietnam Business Forum (VBF) 2014 on December 2.
Foreign investors are keen to acquire ownership stakes in listed firms to establish a presence in the Vietnamese market and over the years have proposed authorities ease restrictions on foreign ownership.
Last year the SSC submitted a proposal to the government on raising the foreign ownership ceiling, to encourage transactions on the stock market. The proposal called for the existing ceiling of 49 per cent to be increased to 60 per cent in certain industries. Mr. Bang said that the proposal is currently being considered by the Ministry of Finance and may take time before being adopted.
The delay in adopting the proposal comes as Vietnam seeks to integrate its stock market more closely with international markets and boost foreign investment. Mr. Bang believes that there are now two approaches to the issue.
“The first approach is that the government issues a decree on relaxing foreign ownership, but this probably won’t be ready until June next year at the earliest,” he told the VBF. “The other approach is that the Prime Minister issue a decision on new foreign ownership rules, which would be faster.”
Vietnam’s securities market attracted $150 million in foreign capital during the first eleven months of the year, a number widely seen by foreign investors as too modest compared to the country’s foreign direct investment of around $10 billion.