An apartment being built by Coteccons.Illustrative image (Photo: VNA) Hanoi (VNA) - A number of listed companies - especially those whose capital structures have run out of space for foreign investment - will discuss raising foreign ownership at their coming annual shareholder meetings.
According to the HCM and Hanoi Stock Exchanges, there are 30 companies that cannot receive additional foreign investment.
Some of these companies are operating in the sectors involved in national security such as banking and property, while some can only lift the limit of foreign ownership on approval of their major shareholders.
Additional foreign ownership has remained a big challenge for listed companies in the Vietnamese stock market.
Recently, the construction giant Coteccons postponed its annual shareholder meeting, which was scheduled on April 13, as the company wanted to ask its shareholders to approve the plan to raise the limit of foreign ownership in the company to 60 percent from 49 percent.
The company’s shares are an attractive target for both domestic and foreign investors, as the construction firm boasts a high growth rate and constant market growth.
In addition, Hoa Binh Construction & Real Estate Corporation will hold its annual shareholder meeting on April 26 to discuss business strategies for 2017 and ask the shareholders to approve the lifting of foreign ownership in the firm.
Other companies that will do the same include Binh Minh Plastic, HCM City Securities, DHG Pharmacy Company and insurance-finance firm PVI Holdings.
Of the four companies, Binh Minh Plastic and HCM City Securities will be the two companies that attract the most attention when they bring the topic of foreign investment to their annual shareholder meeting.
According to the management board of HCM City Securities, raising the limit of foreign ownership would help the company increase share trading liquidity, raise more capital and receive more support from foreign shareholders.
In the case of Binh Minh Plastic, foreign investors hold 49 percent of the firm’s capital. The company has run out of space for more foreign investment and has drawn high attention from some foreign companies such as the Thailand-based Siam Cement Group (SCG) and the plastic sector itself often has big M&A deals with top plastic corporations trying to acquire local companies in order to enter the domestic markets.
The issue of raising foreign investment has remained a difficult challenge for both listed companies and market regulators after the finance ministry in June 2015 decided to allow listed firms to lift the limit of foreign investment, depending on the sectors that the companies are operating in.
Raising foreign ownership in listed companies is also one of the decisive factors that Vietnam needs to take into consideration if it wants to promote its stock market from the level of a frontier market to the level of an emerging market in order to attract higher foreign investment.-VNA
VNA
