The Viet Nam Association of Financial Investors (VAFI) sent a document late
last week to the Government, the State Securities Commission and concerned
ministries to urge them to raise the maximum limit on foreign ownership in
listed companies and commercial banks.

Under Government Decree No 69/2007/ND-CP issued in 2007,
foreign investors are not allowed to own more than 30 per cent of the total
charter capital of any bank or more than 49 per cent of a listed firm.

VAFI has proposed that these caps be raised to 35-40 per
cent for a bank and beyond 49 per cent for a listed company.

“Viet
Nam should consider permitting foreign
investors to purchase common stock or ordinary shares in banks, but without
rights to vote on additional shares,” said VAFI in its proposal.
“This is a valuable lesson from some other countries in the world in order
to help increase capital for banks.”

Thailand, for instance, allowed foreign investors to own
shares representing up to 49 per cent of a bank’s charter capital, and they
were also eligible to own additional common shares without voting rights, the
association said, noting that there was no evidence that such a regime tended
to encourage foreign speculation.

Adopting a similar measure here would help draw more foreign
indirect investment into Viet
Nam as well as stabilise the foreign
exchange market and the balance of payments, said VAFI general secretary Nguyen
Hoang Hai.

VAFI also urged that the equitisation of State-owned
enterprises (SOEs) be hastened, since the number of SOEs equitised during the
three years of 2008-10 was merely half the figure in the single year of 2005.

Experts blamed the slow pace on the poor performance of the
stock market in the two years since the global financial crisis.

“However, we have to recognise that the goal of
equitisation is to improve the operation of SOEs, to remodel corporate
governance and raise transparency,” Hai said. “It is not essential to
sell a large proportion of the State interest, so long as the SOE’s operations
become more effective. We can see lessons from Vietcombank and
Vietinbank.”

Minor stakes could be sold to strategic investors in such
SOEs as Mobiphone, Sabeco, Habeco, and PV Oil if equitisation were carried out,
he said.

A speedier equitisation process in 2011 would help Viet Nam
generate an additional source of foreign currency, helping stabilise the
exchange rate, Hai said.

Source: VNS