Vietnam State Securities Commission (SSC) recently acknowledged that it would widen room (the stake proportion of foreign investors in companies) for securities companies instead of the initial plan, that is widening room for those not belonging to the conditioned business group.
Currently, the Vietnam government has commissioned the Ministry of Planning and Investment to review and classify business list to choose which businesses will have room widened and which not.
Mr Vu Bang, Chairman of the SSC said that based on actual conditions, widening room for eligible enterprises will hardly be implemented on time. However, widening room for securities companies alone will be much easier because there are two types of allowed securities companies with foreign capital in Vietnam securities market that is companies with up to 49 percent of foreign capital or companies with 100 percent foreign capital.
The SSC is separating securities companies from the general plan of widening room to submit to the Ministry of Finance, according to which foreign investors can possess 0 to 100 percent capital in securities companies.
Nationwide there are about 90 active securities companies, including over 40 foreign invested companies, over 10 companies with foreign capital up to 49 percent, 1 company with 100 percent foreign capital (Maybank Kim Eng Securities). Thus, after Decree 58/2012/ND-CP on permitting foreign investors to possess 100 percent capital in a securities company, only 1 company has transferred. Other companies still wait for new regulations from state authorities so that foreign investors can increase possession proportion higher than 49 percent, but not 100 percent.
Mr Vu Bang shared that widening room for securities companies should be implemented soon in compliance with the regulation of the WTO.
He also added that many people are taking advantage of the information to push stock prices up, therefore investors should stay calm and believe in only official news from management authorities to avoid damage.
This is a step backward
Mr Nguyen Huu Viet, Director of Research and Analysis, IRS Securities Company
In my opinion, widening room for securities companies first is a backward step of adjusting room for foreigners. After news of adjusting, the market has not shown any positive signal. The market is still fluctuating under strong resistance level of 560-570 points, the liquidity is not improved, especially there is no sign of a large capital flow coming back to the market.
Only securities companies will benefit
Mr Le Duc Khanh, Director of Investment Strategy, MSBS Securities Company
The facts reveal that the information of widening room has created positive reaction only for securities stocks, rather than activating large capital flow into the market. It is the major condition for the market to overcome the resistance level to go up.
Therefore, the information is not enough to create trust of investors, at the same time it reduces the market’s attractiveness to foreign capital. Consequently, point increase lasts only in short term.
There will be much disorder
Ms Ho Huyen, Head of Investment Consulting Office, VNDS Securities Company
In can be seen that currently, the Vietnam securities market usually over-reacts to both bad and good news, which shows investors’ uncertainty and in turn the instability of capital flows. Therefore, it is not a reliable base to confirm that the market has stopped the resistance level.
Dinh Thanh
Vietnamese
