On Friday morning, 26 June, Nguyen Tan Dung, prime minister of Vietnam, signed a decree lifting foreign ownership limits (FOL) on publicly listed companies.
An official announcement has not been made.
“We are hearing from reliable sources that the Prime Minister of Vietnam yesterday gave the final seal of approval to changes in the Law on Securities to allow for a significant relaxation of FOL for Vietnam listed-equities,” said Lawrence Brader, assistant portfolio manager at PXP Asset Management in Ho Chi Minh City.
The decree has not been released to the public. The timeline and details about what limits remain are not yet known, said Nguyen Duc Huy, head of institutional sales at Saigon Securities.
As reported, brokers and asset managers knew as of July 1 the prime minister had the power to change FOL, and that he had said he would do so. But the extent of changes remains unknown, as some authorities are wary of too much transparency around the books of state-owned companies.
At this point, however, Brader is confident the prime minister is scrapping the current 49% ceiling on owning public companies. (Foreigners can wholly own private companies in most sectors.) FOL on banks, at 30%, is not going to change, according to rumours in the Ho Chi Minh City marketplace. Foreign access to stocks in sectors deemed sensitive by the government will also continue to be limited or denied.
Brader said listed companies would probably need shareholder approval before increasing limits to 100%, although most companies would probably welcome expanding the pool of buyers.
