The Vietnamese government should increase the foreign ownership cap at local businesses to boost portfolio investments, experts at a recent investment conference in Ho Chi Minh City said.
Newspaper Tuoi Tre (Youth) quoted Tran Dac Sinh, chairman of the Ho Chi Minh Stock Exchange (HOSE), as saying international investors accounted for only 16 percent of the total stock transactions in the country this year.
The ratio was relatively low compared to those in regional countries like Malaysia and Thailand, he said, adding that the government should consider measures to attract equity investors.
The country sets the maximum foreign ownership in domestic businesses at 30 percent for banking and 49 percent for the rest.
Of this, many firms like the country's largest insurer Bao Viet had ratios of transferable shares of 10 percent or less, Sinh said.
Economist Tran Du Lich suggested increasing the ratio of transferable shares to perk up the stock market.
He also said the government should gradually lift the ownership cap in local firms, excluding banking, to 60 percent.
The government has been concerned about foreign investors' manipulation of the market, but Lich expected that there would be "no problem at all."
Bui Van Thach, deputy head of the Central Economic Commission, said the maximum rate could even be increased further.
Experts said 11 among 20 leading companies made up $14.8 billion or 38 percent the total market capitalization on HOSE, Vietnam's larger exchange, while foreign investors held less than a quarter.
They also said the sale of state firms' shares would benefit the state budget and accelerate structural reforms in the state-owned sector.
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