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[HO CHI MINH CITY] Vietnam's stocks regulators are proposing to allow foreign investors to own 100 per cent of listed domestic securities firms as part of reforms aimed at beefing-up the country's equities markets.
According to a proposal by the State Securities Commission (SSC) seen by Reuters on Friday, foreigners could be permitted to buy shares of brokerages "without limit", in line with plans to liberalise its capital markets and boost growth.
It is unclear if the SSC, which is seeking public and corporate feedback, would suggest removing limits on sectors beyond securities.
Foreign investors are eager to buy equities listed on one of Asia's fastest-growing stock market valued now at $50 billion, but are frustrated by delays of over 18 months on executive approvals to raise foreign shareholding caps from the existing 49 per cent limit.
Many complain of a lack of room for foreigners in the bourse's more attractive firms where that limit is perennially maxed out.
The initial draft, which had planned to raise the foreign shares ceiling to 60 per cent, is under review by the SSC. Any changes to it would mean the existing plan would be replaced, said Nguyen Quang Viet, head of the SSC's legal department.
Mr Viet told Reuters the SSC was open to easing restrictions on foreign ownership in general, in line with Vietnam's obligations since it joined the World Trade Organization in 2007.
"The trend is for Vietnam to follow its international commitments," Mr Viet said on the sidelines of a meeting between the SSC and brokerages in Ho Chi Minh City on Friday.
Removal of foreign shareholding limits would be a boon for Vietnam's brokerages, which include Saigon Securities Inc and Ho Chi Minh City Securities Corp.
Vietnam's top 12 brokerages posted an average 81 per cent jump in net profit last year. Many are raising funds through stocks and bonds to boost their financial war chests. .
The main VN index has risen 33 per cent in the past two years, helped by low inflation, solid economic growth and broad reform plans for finance and state sectors.