Vietnam said Sunday it will end restrictions limiting the stake foreigners can own in some locally listed companies, the latest move by the communist country to open up to overseas investments. In a decree posted on the government's website, Hanoi said it planned to scrap rules currently forbidding foreigners from owning more than 49 percent of a company.
"For (some) public companies... the percentage of foreign ownership is unrestricted, unless the company's charter stipulates otherwise," the decree said. Vietnam's economy grew by 6.28 percent in the first half of this year, racing along at its fastest rate since 2008, official figures released last week showed. But it remains dominated by huge and often sclerotic state-owned enterprises.
Hanoi is currently in the process of easing business regulations and a long-running privatisation drive, which the government hopes will keep supporting economic growth.
The decree does not clearly state when the restrictions will be lifted, allowing foreigners to take complete control of affected companies, or give details or how many or what type of firms will be exempt.
Analysts cautiously welcomed the announcement, saying foreign companies and individuals would likely jump on an opportunity to further invest in the booming Southeast Asian nation. "It is good decision made at the right time," Le Dang Doanh, a prominent economist and one of the architects of the country's reforms, told AFP.
"Foreign investors could bring more money and capital to the Vietnamese stock market, which could become more active in the future. The decree will also encourage Vietnamese companies to pay attention in a more competitive market."
The Bloomberg news agency said there are believed to be around 30 Vietnamese companies where foreign ownership is currently already at the 49 percent threshold, quoting Hanoi based VNDirect Securities JSC.
"As soon as the limits are raised, you will see a rush to buy in the blue chips," Patrick Mitchell, the head of institutional sales at VinaSecurities JSC, told Bloomberg.
Data compiled by Bloomberg estimates overseas investments in Vietnamese stocks have reached $135.6 million in 2015 through June 25, heading for the ninth straight year of purchases.
The nation's stocks are valued at $58.6 billion, compared with $558.1 billion in Singapore, the region's largest market.
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