HANOI: Vietnam has moved to allow foreign investors to buy shares of local companies through international brokerages, the finance ministry has announced, removing a major hurdle to accessing the fast-growing Asian market.
Vietnam's benchmark stock index surged more than 40 per cent last year, despite new 20 per cent tariffs on exports to its top trading partner the United States.
The easing of investment restrictions comes ahead of Vietnam's expected upgrade to emerging market status by FTSE Russell, enabling the index provider to start including Vietnamese equities by September.
Foreign investors no longer have to open trading accounts directly with a domestic securities company, the finance ministry said on Tuesday of the policy change.
Tran Hoang Son, market strategy director at VPBank Securities Company in Hanoi, said the changes help "reduce technical barriers and administrative procedures... making the Vietnamese market more accessible to foreign capital".
"These reforms serve as necessary conditions to activate medium and long-term foreign capital flows," he added.
The new rules do not alter strict foreign ownership limits.
FTSE Russell announced in October that it was reclassifying Vietnam as a "secondary emerging market", a designation that will put it in the same group with China and India.
The upgrade from "frontier" status, which is subject to an interim review in March, takes effect in September, the index provider has said.
FTSE Russell first added Vietnam to its watch list for an upgrade in 2018, and the country has made sweeping market reforms since then, including scrapping some foreign ownership caps for publicly listed companies.
It has predicted that promotion to emerging market status could unlock up to US$6 billion in capital inflows.
Vietnam has proved surprisingly resilient in the face of new 20 per cent tariffs imposed by US leader Donald Trump, clocking eight per cent growth last year, among the fastest in Asia. - AFP
