The decree, which took effect in September, allows unlimited foreign investment in public companies that are not in certain sectors and in Government and corporate bonds.
The sectors where caps still exist are meant to remain under Government control to safeguard national security and social safety and order.
Saigon Securities Inc (SSI) was the first to announce it was open to full foreign acquisition in 2015. Everpia Vietnam JSC (EVE) did the same on February 3 this year and saw its foreign ownership quickly rise to 58% from 49%.
After its annual general meeting at the beginning of this month, Hoang Huy Investment and Services JSC (HHS) was preparing to enable 100% foreign ownership.
At the same time Vietnam Dairy Products Joint Stock Companym or Vinamilk, consulted with shareholders about selling off seven subsidiaries to make itself more attractive to foreign investors.
Allowing 100% foreign investment is expected to be a hot trend in 2016.
Market observers said the prices of companies enlarging foreign ownership such as EVE, VHC, BIC, and MBB increased sharply after their decision to open up.
The day after EVE decided to open up to foreign investors (Feb 3), its shares became red hot. The price rose by 32% to VND34,400 (US$1.5) as foreign ownership climbed from 49% to 58%.
On February 22, after fisheries company VHC announced foreign investors can own 100%, its share price grew 0.9% to VND34,200 at the HCM Stock Exchange.
On February 2 BIC’s foreign ownership zoomed from 21.5% to 49% and its share hit the ceiling rate of VND18,000.
But some companies remain reluctant to hike their foreign ownership ratio since they are afraid of being categorized as a foreign company.
A company in which foreigners own 51% or more must be listed as a foreign-owned business, and it should abide by a slew of regulations besides suffering from some limitations.
However, a spokesman for the State Securities Commission said the SSC would issue a circular eliminating all such obstacles, including the need to describe themselves as foreign-owned.
Analysts said allowing increased foreign ownership is good for both companies and the market.
It will help expand the market and improve liquidity, thus encouraging further foreign investment.
Companies can mobilise funds easier, while their shares will become more liquid.
They will also benefit from foreign investors’ expertise, experience and resources.