Socialist Republic of Vietnam

The Associated Press

Vietnam will lift a cap on the amount of stock foreigners can own in listed companies in an attempt to attract more investment from abroad, a government official said Monday.

Last July, Vietnam allowed foreign investors to own a maximum of 30 percent of companies listed on the market, up from the 20 percent limit that had been in place since the country's stock exchange was launched in July 2000.

"They (foreigners) will be permitted to buy a higher stake and, in many cases, to own a majority stake in privatized firms," said Pham Phan Dung, director of the Ministry of Finance's Department of Banks and Credit Organizations.

Government bodies are working on the introduction of a new law that would open the market to more foreign investment, Nguyen Van Huy, deputy director of the Steering Committee for Reform and Development of State Enterprises, told Dow Jones Newswires.

Huy couldn't say when the new law would come into effect, but said it might be as soon as the third or fourth quarter this year.

Vietnam will also remove barriers in the coming months to help speed up privatization, said Dung.

Vietnam's stock market currently lists 23 companies. Foreigners have already reached the 30 percent limit in three, and have bought more than 20 percent in another seven, according to State Securities Commission figures.

Vietnam's market index was down 22 percent in 2002 and nearly 9 percent in 2003, but it has risen 65 percent so far this year, thanks to strong foreign buying.

Many market observers share the view that government efforts to boost foreign investment will help attract more Vietnamese investors into the market.