Foreign investors may soon be able to open more than one trading account in Vietnam as the first in a series of expected stock market liberalizations, said State Securities Commission (SSC) deputy chairman Nguyen Doan Hung at a meeting over the weekend.

Currently, foreign investors are only allowed to open one Vietnam dong (VND) securities trading account to buy or sell securities.

The SSC deputy told the meeting's representatives from 42 foreign and local fund management companies that institutional investors have helped shape the country's stock market.

Recent government moves have encouraged foreign investors to pour more investment into the market, said Hung, adding that the Government is likely to allow investors from abroad to open two securities accounts soon.

As companies suggested trading regulation changes, Hung said the rules are already relaxing.

He said local firms are now allowed to open branches and set up 100 per-cent foreign investment units abroad.

He also said they could promote fund management company alliances in Vietnam.

He said he expected that companies would continue applying new models of investment in the market.

The deputy chairman also posited that the market would likely be open for trading through the evening in the future, instead of closing in the afternoon as it does now.

To make the trading more fair and transparent, cell phones will be restricted on the trading floor, he said.

There are around 300,000 securities trading accounts open in Vietnam, home of the country's main trading floor, five percent of which are foreign investor accounts.

Hedge funds in Vietnam?

Dominic Scriven, director of Dragon Capital, said Vietnam's stock market has yet to integrate deeply into the world's stock markets.

But he was confident it would as more foreign funds and institutional investors come to Vietnam.

Foreign funds and institutional investors not only bring about capital but also contribute to developing the local market, said Scriven, who has followed Vietnam's stock market for years.

More than 70 foreign funds are expected to enter Vietnam in the near future.

Such an influx could bring some US$4-5 billion in capital to the country.

Additionally, funds operating in Vietnam are expanding capital and their investment scope.

Pham Ngoc Bich, CEO of Prudential Fund Management Company Vietnam, said the government should allow mutual-open and hedge funds into the country to diversify investment capital.

The Blackhorse Enhanced Vietnam Inc. (BEVI) fund was officially launched in Vietnam last Wednesday as the country's only open investment vehicle.

The fund has a $110-billion portfolio of 60 percent pre-listed shares and 40 percent listed shares.

Truong Khoi, founder of US-based hedge fund KHT, said he plans to invest in Vietnam as soon as the government green-lights hedge funds.

Source: ThanhnienNews.