Vietnam to raise ceiling on foreign ownership ratio in local businesses

VnnNews – Vietnam is set to release a decision to lift the ceiling on foreign ownership ratio in local businesses to 49 percent.

The good news for foreign investors was released by deputy chairman of the State Securities Commission (SSC) Nguyen Doan Hung on November 30 at the workshop on the capital and finance market co-organised by Euromoney and the Ministry of Finance.

 

Hung said the government will increase the maximum foreign ownership ratio in public companies from 30 percent to 49 percent of total chartered capital, except credit institutions.

 

As for member funds, there will be no limitation on foreign ownership ratio, and that up to 100 percent foreign owned member funds will be allowed.

 

Hung said the government is also considering allowing foreign investors to hold up to 49 percent of total chartered capital of local securities trading organizations. From 2012, these subjects will be able to hold 100 percent of chartered capital of local securities trading organizations.

 

Hung said this is one of the policies the Government of Vietnam will apply to lure more foreign investors to its stock market.

 

Representatives of big investment funds who were present at the workshop all confirmed that foreign investors are very interested in Vietnam’s stock market.

 

Andy Ho, managing director of Prudential Vietnam Fund said he has found from the meeting with foreign investors that investors all remain optimistic about Vietnam’s stock market in the medium and long term. The robust growth of the market in the last 2-3 months has caught the attention of foreign investors.

 

At the workshop, deputy director of the Department for General Affairs under the Ministry of Finance Nguyen Dang Binh informed that the Government has set up the goal of obtaining 7.8 percent per annum in GDP growth rate in the period of 2011-2015. Meanwhile, the figure the National Assembly has set for 2010 is 6.5 percent.

 

Discussing the GDP growth rate Vietnam needs to obtain, Asian Development Bank’s Director Ayumi Konishi said Vietnam’s economy should not develop too rapidly in the next 3-5 years. Currently, the total domestic demand has exceeded the total supply and if the problem cannot be settled, the trade deficit will become a hindrance for the national economy.

 

However, in order to use up to 1.7 million new laborers every year, the GDP growth rate should be no less than five percent per annum. Therefore, he thinks the targeted 6-6.5 percent per annum GDP growth rate would be more reasonable.

 

The GDP growth rate of 6.5 percent is also described by Vu Quang Thinh, general director of Saigon Investment Capital (SGI) as a reasonable goal to strive for in 2010, when the second demand stimulus package is implemented. He believes the high population and a national economy with many fields which still have room for development both are the biggest of Vietnam nowadays to attract investors.

 

For example, Thinh said, Vietnam’s energy sector still has the high growth rate of 18 percent per annum. Meanwhile, in other countries, the market has become nearly saturated.

VietNamNet/VNE, VnMedia

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Tags: At The Workshop, Foreign Investors, Foreign Ownership Ratio, Gdp Growth, Gdp Growth Rate, Growth Rate, Per Annum, Percent Per, Percent Per Annum, The Gdp Growth, The Gdp Growth Rate, The Government

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