Vietnam SSC Chairman Proposes Widening Room in Banks for Foreigners to 35 per cent

Chairman of the State Securities Commission, Vu Bang, the stock market watchdog, has proposed allowing foreign investors to hold up to 35 per cent stakes in banks, up from current 30 per cent as part of efforts to attract foreign investors in the face of the global economic downturn.

 

"By increasing room for foreigners, we can attract foreign investors in coming months, particularly in the context of difficult outlook of the whole economy and stock market this year. Exports and FDI attraction will be affected by the slowdown," Vu Bang said.

 

Currently, Vietnam has allowed 100 per cent foreign-invested banks to set up branches in Vietnam while room in local banks is still capped at 30 per cent, Bang noted.

 

"We should allow foreigners to hold up to 49 per cent stakes in unlisted firms as well," Vu Bang recommended.

 

To prevent the market from further slumps, we [Vietnam] should promote images of Vietnam and promulgate about the local stock market outside to entice investors.

 

SSC's chairman also proposed to increase transparency of the market, create favorable forex mechanism to attract indirect foreign investment with provisions.

 

Last year, capital mobilization via share-issuing to increase capital, shares and bond sales through the stock market dropped 75 per cent to 80 per cent and foreign portfolios are cashing out of the market, which peaked VND7 trillion in June last year, Bang said. (www.mof.gov.vn))