Long-awaited new rules allowing foreigners to take bigger stakes in Vietnamese equities took effect on Tuesday, but confusion over which sectors are eligible could dim their investor appeal.
The move to allow foreign shareholdings of up to 100 percent in some firms, versus the previous 49 percent ceiling, is one of the most liberal measures yet adopted as Vietnam pursues broad economic reform.
Vietnam is also bidding to have its VN Index included in MSCI's emerging market index, increasing its appeal to a wider range of investors.
The VN Index is the only Southeast Asia gauge to have gained this year and "stands out in Asia", investment advisor Marc Faber, writer of the Gloom, Boom & Doom Report, told CNBC recently.
But with the government yet to provide detailed guidance on which sectors are restricted and which will be opened, investors say Vietnam's "grand opening" is unlikely to raise pulses.
Foreign investors only care when the new rules are actually implemented, not a promise to implement" -- Le Anh Tuan, Dragon Capital
Le Anh Tuan, chief investment officer at Dragon Capital, said foreigners won't jump in yet.
"Foreign investors only care when the new rules are actually implemented, not a promise to implement," he said.
The delay in raising the foreign ownership ceiling has frustrated investors keen to tap Vietnam's potential. Now they must contend with rules that appear complex, vague and could cause regulatory overlaps with sector-specific legislation, banking for example.
Except sectors carrying conditions on foreign investments, the decree says full foreign ownership is allowed in areas Vietnam has committed in unspecified international agreements to liberalizing - unless subject to other laws.
In a research note, Vietnamese fund Dragon Capital said the easing of restrictions would effectively be staggered while regulators classify dozens of sectors, muddied by multilateral trade deals under negotiation.
But where there's clarity, there have been big gains.
Shares in top insurer BaoViet Holdings soared 65 percent over a two-week period in July to a high of over three years after the finance minister said insurers would have no foreign ownership ceiling.
Top broker Saigon Securities Incorp climbed 6.64 percent on Friday after the State Securities Commission (SSC) confirmed it could remove foreign limits.