Jan. 10 (Bloomberg) -- Vietnam’s stocks gained, with the benchmark index capping the biggest weekly advance since May, on speculation an increase in foreign ownership limits for banks may presage a broader easing of overseas investment rules.
The Ho Chi Minh City Stock Exchange’s VN Index rose 0.4 percent at 3 p.m. local-time close to the highest level since June 11. The gauge rallied 2.7 percent this week, the biggest increase since the period ended May 31. PetroVietnam Gas Joint-Stock Co., the country’s largest listed company by market value, added 2.2 percent to the highest close since Aug. 20. Vietnam Dairy Products Joint-Stock Co. gained 1.5 percent.
The government this week issued a decree that will allow foreign investors to take bigger stakes in the nation’s lenders, in a bid to bolster an ailing banking system. The limit for foreign so-called strategic investors will be increased to 20 percent from 15 percent, according to a statement posted on the government website on Jan. 6. The prime minister can lift the limits in special cases to help weak banks “restructure and ensure their safety,” according to the decree, which takes effect Feb. 20.
“The move is the first step toward allowing greater foreign ownership in listed companies,” said Giang Trung Kien, head of research at FPT Securities Joint-Stock Co. “Foreign investors have been adding stocks this week in anticipation of the change, and that boosted sentiment in the overall market.”
International investors bought a net $5.5 million of shares on the Ho Chi Minh City Stock Exchange yesterday, the most since Dec. 20, according to data compiled by Bloomberg.
Prime Minister Nguyen Tan Dung is considering extending the changes to other listed companies. The Ministry of Finance has submitted a plan to the prime minister calling for the limit on overseas investors’ holdings of voting shares in some industries to be lifted to a maximum 60 percent from 49 percent, Nguyen Son, head of market development at the State Securities Commission, said on Nov. 14.
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