Rules eased for IPOs

Sunday, May 18, 2008
Decree No109/2007/ND-CP of June 26, 2007, regulating the participation of investors in the equitisation of State-owned enterprises, allows non-strategic foreign investors to take part in bidding on initial public offerings (IPOs) alongside domestic investors.

However, overall foreign ownership in a commercial bank has been capped at 30 per cent. A single institutional investor is allowed to hold no more than 15 per cent of total stake.

In the Vietcombank IPO last December, for instances, foreign investors were allowed to buy shares without State Bank permission.

Similarly, VAFI’s proposal would allow foreign investors to pick up bank shares already trading on the OTC market without any further regulatory approval, as long as the total stake were not to exceed 5%.

"This would help free up frozen bank shares on the OTC market and help dispel the heavy spirit of investors on the stock market," said Hai.

VAFI said, "We hope that state regulators will work together more closely to draft a suitable policy to help the stock market rebound." A source from the State Bank told VNS by phone yesterday that "I think the control is really necessary because the banking sector is the life blood of the economy."