The Prime Minister on Thursday ratified Decree 60/2015 to replace Decree 58, which included a long-awaited regulation on removing limits on foreign ownership in listed companies.
Minister of Finance Dinh Tien Dung revealed this at the ministry’s meeting held yesterday to revise results in the first half of the year and plan for the second half.
The new decree will not only have huge, positive impacts on the development of the securities market but also accelerate the privatisation process that the Government is determined to hasten drastically and efficiently, Dung said.
“When Decree 60 takes effect and foreign stakes are lifted, a significant amount of foreign capital is expected to flow in and boost markets,” he added.
Deputy Chairman of the State Securities Commission Nguyen Thanh Long also confirmed the approval of the new decree, bizlive.vn reported.
The current regulation capped foreign stakes in public companies at 49 per cent.
Under the new decree, foreign stakes can be lifted up to 100 per cent for most sectors, and firms will also be allowed to propose their own limits. However, the limit on foreign stakes at banks will be retained at the existing level of 30 per cent.
The details of the regulation will be disclosed soon. SSC’s Chairman Vu Bang noted that detailed instructions for the implementation of the new decree will be issued soon.
Both benchmark indices closed down yesterday after sell-offs in the afternoon trading as investors were still awaiting more details of the new decree.
According to the BIDV Securities’ statistics, dozens of listed companies in national bourses currently ran out of “room” for foreign investors, including major names such as Vinamilk, FPT Group, and REE Corporation.
Stock analysts see the lifting of limits on foreign stakes as a significant impetus for the stock market this year, predicting an inflow of foreign capital worth billions of dollars, together with increasing mergers and acquisitions deals.
At the recent Viet Nam Business Forum, Nguyen Kien, a representative of the capital market working group, said the scale of Viet Nam’s stock market remained modest in comparison with the markets of other countries in the region. Viet Nam’s market capitalisation was equivalent to 25 per cent of GDP, while the rates were 65 per cent in the Philippines and 112 per cent in Thailand.
Experts remarked that the modest scale of the stock market would make it hard to support the privatisation process, adding that opening more doors for foreign capitals would be a solution.
Double-digit growth in domestic tax collection
At yesterday’s meeting, Dung said domestic tax collection for the full year should grow by at least 10 per cent.
According to Deputy Minister of Finance Vu Thi Mai, the State budget brought in VND446 trillion (US$20.46 billion) in revenue in the first half of this year, or 49 per cent of the estimated collection, in which domestic tax collection accounted for more than 73 per cent.
However, she noted that tax collection for crude oil dropped 34.5 per cent over the same period last year due to plunging oil prices.
In response, Dung said that domestic collection (excluding crude oil and land use fees) must increase by at least 10 per cent to meet the State revenue collection target.
He stressed that unpaid tax, which is estimated to reach VND 71 trillion ($3.256 billion), would be revised and tackled.