Maybank Kim Eng ready to be first 100pc foreign owned securities company in Vietnam

What do you think about the Vietnamese government raising the foreign ownership limit in local companies and what do you think it is an appropriate adjustment?

Firstly, I think this will make Vietnam even more attractive as a foreign investment destination. Compared to other markets in Southeast Asia, Vietnam is the strongest performing. For example, Indonesia and Thailand did not hit growth expectations for the first half of this year, whereas Vietnam still marked 5 per cent.

Maybank Kim Eng works all around the world, and we understand how attractive Vietnam is for many investors. However, Vietnam’s cap on foreign ownership shares in listed companies should be raised. Vietnam is currently in the MSCI Frontier Market Index, if it raises the cap, it will be listed on the MSCI Emerging Market Index. With foreign indirect investment already increasing by 16 per cent in the first half of this year, allowing foreign entities higher ownership stakes would only further drive cash flow.

Which industries do you think will be most attractive if and when the Vietnamese government raises the ownership cap?

The banking industry is the easy answer. Currently, foreign ownership in banks is limited to 30 per cent, 20 for strategic investors and 10 for non-strategic. This limitation dissuades many investors. Another industry is consumer goods because of the country’s emphasis on and success with manufacturing.

What other regulation changes would help grow Vietnam’s capital market?

In my opinion, regulations governing listed companies’ annual reports need to be improved. Balance sheets are very important to capital market investors and they want to have confidence that these reports reflect the reality of a company’s condition. Also, the Vietnamese government needs to lock down on insider trading. These two issues are not isolated to Vietnam, many developing economies have similar issues.

Maybank is working toward being a wholly-owned limited company in Vietnam. Why is that?

Just last week we finished our application for approval as a wholly-owned securities firm and we expect approval from the State Securities Commission soon. We were the first foreign invested securities company six years ago and now we want to be the first 100 per cent foreign owned securities company in Vietnam’s capital market. The biggest reason for this is our company structure all over the world is to have local subsidiaries in all the countries we operate. This move also shows our long-term commitment to the Vietnamese market. We want to invest more, and expand our business here.

Currently the Vietnamese stock market is in a major downturn, why did the company make this decision during a slump?

The market may suffer for another two years, but that is true throughout all Southeast Asia. We are here for the long-term and we are not factoring the recession into our macro plans. We have confidence that the Vietnamese government’s response to the situation will be successful. They have assigned the Vietnam Assets Management Corporation to the non-performing loan problem and the liquidity problem could be solved by raising the foreign ownership cap. If the Vietnamese government makes this change, recession or not, there will be a much stronger economic situation.

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