Vietnam removes foreign ownershispan caspans on most equities: state TV

HANOI – Vietnam"s government approved the removal of foreign ownership caps on most listed firms on Friday, state TV said, scrapping the current 49 percent limit in one of its most liberal economic reforms yet, although some sectors will be excluded.

The government is stepping up reforms to the $184 billion economy after years of delay that have frustrated foreign investors keen to tap the potential of its private sector, with future Pacific and European Union free trade pacts adding to the allure.

In a news bulletin, Vietnam Television said the government had signed a directive to amend the rules but did not say when the change would come into effect.

It gave few details, but said the new rules would not apply to certain firms or sectors in which the state needed to retain controls, without elaborating.

Brokers and fund managers contacted by Reuters said they had not seen the directive and it was not released to the media.

Long criticised for protectionism, Vietnam has eased limits in areas such as banking and property and is pursuing the partial privatisation of hundreds of state-run firms from airports and textile companies to breweries and ports, which will eventually list on its stock markets.

Duong Vuong, a director at Vinacapital, one of Vietnam"s biggest funds, said foreign investors were interested in the market but had long been shackled by the ownership limits.

"Everyone has been waiting for this for a long time … It"s good timing with everything going on in Vietnam."

Debate on raising the ownership cap has dragged on for nearly two years, with the initial plan being to raise the foreign ceiling to 60 percent. That was reviewed earlier this year and the market regulator, the State Securities Commission, held forums to seek public feedback.

Investors have complained that foreign shareholdings in Vietnam"s most attractive firms are perennially at the ceiling, leaving little room for buying.

In previous proposals, the government has referred to sectors that are off-limits to foreign investors as "sensitive", such as those related to national security. Some areas covered by separate legislation, such as banks, will also be excluded.

Vietnam has two bourses, the Ho Chi Minh Stock Exchange with a market capitalisation of $50.3 billion, and the far smaller Hanoi Stock Exchange, with equities valued at $6.5 billion. That compares with Thailand"s $419 billion and Indonesia"s $345.7 billion.

Vietnam removes foreign ownershispan caspans on most equities: state TV

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