10:33 | 08/10/2015 Investment
Foreign invested enterprises now can more easily list their shares on Vietnamese stock markets under Decree 60 that allows foreign investors to hold up to 100% of stake in Vietnamese enterprises.
The decree, which takes effect on September 1, allows foreign invested enterprises in Vietnam to list on Vietnamese bourses without having to renounce the controlling rights.
For example, Unilever can let one of its subsidiaries to list shares on the bourse and sell 20% stake to other investors and still hold control over the company.
It will take some more time to bring the policy into life, but this is an important step made by the government of Vietnam, Michel Tosto from Ban Viet Securities Company said in Asia Money.
It is obvious that Decree 60 would help provide more new valuable commodities to the stock market, since there are many profitable foreign invested enterprises in Vietnam.
Listing shares on the Vietnamese bourse will bring big benefits to foreign invested enterprises as they can seek capital in Vietnam.
In the immediate time, foreign invested enterprises may not think of mobilizing capital through the Vietnamese stock market because of the small scale of the market. However, in the future, when the market develops, listing shares in Vietnam would be a good solution for foreign invested enterprises.
Some private investment funds have shown their interest in the possibility of some companies in their investment portfolios listing their shares on the bourse.
2015 has witnessed the strong recovery of foreign direct investment (FDI) in Vietnam. In the first eight months of the year, newly registered capital reached US$13 billion, a sharp increase of 30% compared with the same period last year.
Foreign invested enterprises have been performing well in Vietnam. The economic sector exported US$9.38 billion worth of products more than imported in the first eight months of the year.
Regarding the stock market performance, after making a good start with the VN Index nearly hitting the 640 point threshold, the index has decreased to 560 points because of bad news about dong depreciation, oil price falls and foreign investors withdrawing their capital from new emerging markets.
According to the Institute of International Finance (IIF), in August alone, investors withdrew US$8.7 billion from new emerging stock markets, the strongest disinvestment since mid-2013.
However, Vietnam remains one of the world’s most attractive markets. The VN Index has increased by 8% this year, while neighboring markets have had negative growth./.