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Higher foreign ownership ratio to attract investors
The percentage of foreign ownership, which will be a hot topic in the Q2 annual general shareholder meetings (AGM), will be an attraction for local stocks, securities experts said.
Last week, securities officials and researchers who met to talk about investment trends in an online conference, said in the next AMG season from March to May, the SSC's regulation that suggested all public companies should declare their foreign ownership in these meetings would agitate the market.
Doan Thi Thanh Truc, from Rong Viet Securities Company, said foreigners continued to be net sellers since the beginning of the year. However, foreign investors are becoming net buyers again of late.
Truc said foreigners would continue to be net buyers in the next quarter, thanks to better price earnings ratio and potential earning per share.
Pham Van Thinh from Deloitte Viet Nam said more openness to foreign investment was mandatory now as Viet Nam has signed more agreements such as the Trans-Pacific Partnership (TPP) and free-trade agreements. At the same time, state-owned enterprises' (SOEs) equitisation plans will make more than 200 SOEs sell their shares at IPOs this year and, thus, investors will have an opportunity to choose good stocks at a reasonable price on the primary market for long-term holding.
IPOs of large enterprises such as Mobifone, Satra and the Benthanh Group are receiving a lot of attention from investors in 2016.
On March 15, another conference held by multilateral policy department, the ministry of industry and trade, said the regulation about most favoured nations in the Trans-Pacific Partnership (TPP) forced each of its members to ensure that foreign investors were treated no less favorably than domestic investors or non-TPP.
Under the TPP, foreign investors can own a 65 per cent stake in a local enterprise, instead of 49 per cent as at present.
Working in the garment and textile industry, which is considered to be the industry that will gain the most by the TPP, Chairman of the TNG garment company Nguyen Van Thoi said his firm would allow 100 per cent foreign ownership.
Seven stocks have raised their maximum foreigner ownership limit so far, such as 100 per cent in SSI, VHC and EVE; 49 per cent in BIC and REE; and 20 per cent in MBB.
Last week, TSC and AAA also announced their plan to offer 100 per cent stake to foreigners.
Director of the State Securities Commission Nguyen Sơn said though raising the stake limit for foreigners in public companies could be an attraction in the local market, it was not a trend for all companies.
Sơn said of the total 700 listed companies, only 30 have raised their foreign ownership ratio to the maximum, while the rest have low or no foreign ownership.
Sơn said before thinking of increasing the foreign ownership limit, local enterprises should focus on boosting efficiency in business, corporate governance and transparency of information disclosure.
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