VietNamNet Bridge – Foreign stock investors still hope they can buy REE, FPT or VNM shares – the blue chips - one day, when the government accepts to lift the ceiling foreign ownership ratios in Vietnamese enterprises.

Roger Lewis, an US investor who has account at VNDirect Securities Company, complained that he still could not buy any shares in Vietnam in the last few months, just because the room for foreign investors in the enterprises is zero percent.

It takes the investors at least one or two months to learn about some shares or companies before making investment decisions. He wants to making long term investments instead of surfing on investments – buying today and selling the other days.

However, the US investor cannot have the opportunities, because the companies he wanted to make investments in do not welcome more foreign investors.

Roger is not alone. The foreigners’ demand for Vietnamese stocks has been increasing steadily. According to the Vietnam Securities Depository Center (VSD), in October 2013 alone, the number of foreign investors granted transaction codes was higher by 13 percent over the previous month and double the figure of the same period of the last year.

A report by the center showed that 604 foreign investors have been granted transaction codes so far this year, including both individual and institutional ones, an increase of 70 percent in comparison with the same period of the last year.

Of the 700 shares being listed on the two HCM City and Hanoi bourses, 20 have no more room for foreign investors, according to VnExpress.net. Those, who still want the shares, have to negotiate directly with the other foreign investors on trade deals.

Analysts have noted that when flocking to the Vietnamese stock market, the majority of foreign investors tend to hold shares for medium and long terms, especially the blue chips like FPT, the leading technology firm in Vietnam, REE, the refrigeration engineering company, DHG (Hau Giang Pharmacy) and VNM of VInamilk, the leading dairy producer.

The post tax profit of the listed companies in the first nine months of the year was 5-70 percent higher than that of the same period of the last year, while the EPS also soared by 2-70 percent.

Over the last six months, the market prices of the blue chips have increased by VND10,000-50,000.

A securities broker of Military Bank Securities Company noted that the biggest difference between a Vietnamese and a foreign investor lies in the financial capability.

Foreign investors, who have a good financial situation, tend to hold shares for a long time, while domestic ones with limited capital, cannot keep shares for a long time. While foreign investors tend to buy blue chips, Vietnamese prefer penny or midcap stocks with lower prices.

In an effort to attract more foreign investments to Vietnam, the State Securities Commission (SSC) in July proposed the government to allow to raise the individual foreign investors’ ownership ratio by 10 percent through non-voting share issuance.

However, no official decision has been made over the last four months.

A Malaysian investor who has account at the HCM City Securities Company said he has got impatient about the room lifting.

“I don’t care much if I can only buy non-voting shares. The thing I want is the dividend and the increase in my capital after the disbursement,” he said.

Kim Chi