VietNamNet Bridge – Foreign investors are concerned about the delay of lifting the ceiling for foreign-ownership ratio in Vietnamese enterprises to October 2015.

Dominic Scriven, general director of Dragon Capital, an investment fund management company, commented that foreign investors could leave while waiting for the ceiling to be raised.

Scriven, representing the Capital Market working group of the Vietnam Business Forum, has asked the government and the Ministry of Finance to allow foreign investors to raise the current limit of 49 percent of foreign ownership of shares in Vietnamese businesses.

The State Securities Commission (SSC) and MOF said they were following necessary procedures to make a decision soon.

Meanwhile, SSC, the watchdog agency, said the commission is not powerful enough to make a final decision on the issue.

Just four days before the Vietnam Business Forum began in mid-December, SSC’s Chair Vu Bang, interviewed by Bloomberg news service, said the agency will submit a plan on lifting the ceiling foreign ownership ratio in October 2015.

Scriven told the local press that foreign investors were very disappointed because the issue has remained unsettled for many years.

He called this a “failure” of the Capital Market working group, saying that foreign investors will have nothing to do in the next year as the long decision has not been released.

A senior executive of a foreign investment fund in Vietnam said the latest news released by SSC has “poured cold water on all investment funds in Vietnam”.

“Foreign investment fund management companies really want to see the Vietnamese stock market recover, so that they can easily raise new funds after liquidating old ones,” he explained.

“If they have to close the existing funds but cannot start new funds, they will have to leave Vietnam or look for other jobs. No one wants this,” he said.

Don Lam, general director of VinaCapital, noted that it is now very difficult to raise funds at this moment.

Scriven of Dragon Capital, which has raised $100-200 million over the last year, also said it is getting more and more difficult to persuade investors to invest in Vietnamese stocks.

Thoi Bao Kinh Te Sai Gon reported that Bang of SSC, after hearing about the foreign investors’ disappointment, tried to reassure them that a decision to replace Decision No 51 on offering “more room” to foreign investors in Vietnamese enterprises may be released in June 2015.

Thanh Mai