Vietnam's foreign ownership cap for non-banking firms set to rise to 60 pct

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The government is likely to amend the laws to increase the foreign ownership limit in non-banking businesses to 60 percent from the current 49 percent before Lunar New Year, which falls on January 31 this year.

News website Saigon Times quoted an executive at the State Securities Commission as saying this, adding that the proposed amendment to a 2009 resolution to effect this received great support within the government.

The ownership limit could be raised with approval from a company's shareholders and the commission.

According to the executive, the draft had initially stipulated that firms had to seek permission from the Ministry of Finance or the government and not the commission.

It also subsequently waived an initial requirement that firms had to hold a meeting to get shareholders' votes for approval, allowing them instead to get the approval without one.

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Analysts and insiders have been expecting the increase in cap following the government's decision to increase certain ownership limits in banks earlier this month.

A strategic foreign investor can own 20 percent of a bank from February 20, up from the current 15 percent.

The cap for foreign organizations will rise to 15 percent from 10 percent.

But the total foreign ownership limit will remain at 30 percent.

Analysts have said an increase in foreign ownership of businesses could positively impact the stock market, a minor player in the region with a market capitalization of just a fraction of that of the Thai and Singaporean markets.

According to the main bourse, the Ho Chi Minh Stock Exchange, in the first eight trading sessions of the year foreign investors pumped VND422 billion (US$20 million), a record high for recent years.

This year the exchange's benchmark VN-Index has gained 5.8 percent to rise to 533.54 on January 16.

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