Slip up opens door for foreign investors

Overseas parties are desperate to take a big stake in listed firms

The Ho Chi Minh City-based Vietnam Securities Depository (VSD) last week announced it had incorrectly counted the share numbers of Ben Tre Aquaproduct Import and Export Joint Stock Company (ABT) and Tan Tao Industrial Park Corporation (ITA) that foreign investors were allowed to buy.
“The foreign ownership in ABT now exceeds 0.01 per cent and we expect that they the foreign investors would soon sell stakes to reduce the ratio to the appropriate level,” said Do Thu Trang, director of VSD’s Ho Chi Minh City branch.
Foreign investors can buy up to 3.1 million ABT shares, according to Ho Chi Minh Stock Exchange (HoSE) statistics.
Trang, meanwhile, said that foreign investors could buy 13.9 million ITA shares as of August 6, rather than 15.9 million shares as it had mistakenly calculated.
It is the second time VSD has made mistake in calculating the current ratio for foreign investors within a month after incorrect calculations for Sacombank (STB), the country’s first listed banking stock. However, no one was punished or held responsible.
“It is just a mistake. We will pay more attention to it,” VSD director Phuong Hoang Lan Huong said last month.
Foreign investors are pushing the Vietnamese Government to lift its restrictions on foreign ownership of listed firms, especially blue chip stocks in banking, technologies, and property.
While the Vietnamese Government has yet to decide on the issue, VSD’s mistakes could provide legal opportunities for foreign investors to raise their stake in these listed firms.
The HoSE on August 21 asked securities companies to stop foreign investors from placing STB orders as it found that VSD made mistakes in calculating current ratio that foreign investors can buy up to a 49 per cent stake, rather than the 30 per cent limitation.
However, before the announcement was made, foreign investors rushed to buy an additional 1.2 million STB shares, exceeding the permitted foreign ownership. The HoSE said these transactions were still effective.