Foreign investors get more access to State-owned firms

VietNamNet Bridge – Foreign investors will be eligible to buy into State-owned enterprises (SOEs) in certain sectors, pending Government approval, according to a new decree.

Customers make transactions at Techcombank. The bank rose its charter capital to more than VND3.16 trillion with total assets valued at over VND53 trillion. HSBC now holds a 20 per cent stake in Techcombank.

Also under Decree 109/2008/ND-CP on the transferral and sale of State companies, intermediary financial institutions and individuals involved in evaluation and auction of SOEs will not be allowed to buy stakes in SOEs.

The decree replaces Decree 80/2005/ND-CP on SOEs and is expected to open wider doors for foreign enterprises to get involved in buying and selling enterprises and heat up the merger and acquisition (M&A) market in Viet Nam as it allows them to buy the whole SOE in certain sectors.

In the past two years, M&A activities in the finance and banking sector have drawn keen interest from foreign investors.

In August alone, the French Societe-General bank bought a 15 per cent stake in the Southeast Asian joint-stock bank, while HSBC increased its stake in Techcombank to 20 per cent and the Singaporean OCBC acquired 15 per cent stake in VPBank.

TigerInvest’s website www.muabancongty.com offered around 600 investment opportunities this year, instead of 200 for the whole of 2007.

According to experts, merger and acquisition is the quickest way for foreign investors to approach the domestic market and take advantage of Vietnamese partners’ distribution networks as well as their staff.

Head of the Foreign Investment Agency under the Ministry of Planning and Investment (MPI) Phan Huu Thang forecast that Viet Nam would see a stronger M&A trend, especially in integration and competition. Between 35-50 per cent of Vietnamese enterprises would be merged in the next 6-10 years, Thang added.

MPI was working with related agencies to improve legal regulations for M&A activities, Thang said.

(Source: Viet Nam News)

Update from: http://english.vietnamnet.vn//biz/2008/10/809754/

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