Vietnam’s stocks rallied, sending the benchmark index toward the biggest weekly advance in a year, amid speculation the government will relax restrictions on foreign investment in equities.
PetroVietnam Gas Joint-Stock Co., the largest listed company by market value, rose 2 percent, heading for a record close. Vietnam Dairy Products Joint-Stock Co., or Vinamilk, advanced to the highest level in four weeks.
The Ho Chi Minh City Stock Exchange’s VN Index (VNINDEX) jumped 2.3 percent to 545.85 at 2:25 p.m., extending this week’s gain to 5.2 percent. VNDirect Securities Co. said investors are expecting the easing of limits “very soon” after a plan was submitted to the prime minister that would allow foreigners’ holdings of voting shares in some industries to be increased to a maximum 60 percent from 49 percent.
“Strong inflows from foreign investors in anticipation of the change in the foreign-ownership limits has boosted sentiment in the overall market,” said Nguyen Ba Huy, research director at VNDirect, Vietnam’s fifth-largest brokerage.
International investors bought a net $9.2 million of shares yesterday, a 19th day of purchases, the longest such streak since October, according to data compiled by Bloomberg. They bought $23.2 million of shares this week through yesterday, poised for the biggest week of purchases since the period ended Dec. 20.
The Ministry of Finance submitted the foreign-ownership limits plan to Prime Minister Nguyen Tan Dung, Nguyen Son, head of market development at the State Securities Commission, said on Nov. 14.
The government last week issued a decree that will allow foreigners to take bigger stakes in the nation’s lenders, in a bid to bolster the banking system. The limit for foreign so-called strategic investors will be increased to 20 percent from 15 percent, according to a statement on the government website on Jan. 6. The move boosted speculation of a broader easing of overseas investment rules.
Vinamilk rose 1.5 percent, heading for the highest close since Dec. 20. Revenue of the country’s biggest dairy producer jumped 17 percent to 31.7 trillion dong last year, Dau Tu Chung Khoan magazine reported today.
Huy said investors were also “excited” because the benchmark index had broken through the level of 533. “The rally trend is getting clearer,” he said.
To contact Bloomberg News staff for this story: Nguyen Kieu Giang in Hanoi at firstname.lastname@example.org