Vietnam may allow bigger foreign stakes, but restrict voting rights    Vietnamese regulators will next month propose allowing foreigners to own bigger stakes in listed companies to boost the country's stock markets, but some investors warned that gains could be limited because of the lack of attractive firms and restrictions on voting rights. The State Securities Commission (SSC) wants to encourage more foreign inflows into one of Asia's best performing bourses and the plan to raise the 49 percent foreign shareholding limit by 10 percentage points helped lift the benchmark VN Index 1.4 percent on Friday to a week high of 527.97 points. Traders say the index in Ho Chi Minh City, which has gained 26 percent this year, has been an attractive bet for foreign and domestic investors reluctant to put their money elsewhere in Vietnam. A slowing economy hamstrung by banks laden with bad debts and uncertainty about the government's ability to tackle structural problems are the main reasons for the exchange's allure. "It's good policy and it would help the market with more liquidity from foreign investors," said Alan Pham, chief economist at VinaSecurities. "It will bring more foreign capital." Nguyen Son, director of SSC's Market Development Department, told Reuters the additional stakes made available to foreigners would be restricted to non-voting shares, which some traders said could dampen enthusiasm. "Though it will have a positive impact initially, the regulator's move is not strong enough for foreign investors to put money in (for) the long term," said Trinh Hoai Giang of Ho Chi Minh City Securities. Vietnam's two stock indices, the benchmark VN Index and the smaller Hanoi Stock Exchange Index, have a combined market capitalization of almost $45 billion, compared with $420 billion in Thailandand $459 billion in Indonesia . Vietnamese regulators say they are also working out plans to merge the country's two bourses. Michel Tosto, director of institutional sales at Ban Viet Securities, said the plan to increase foreign shares could take time to implement and foreign investors would be selective about companies in which they wished to buy shares. "Of course, should that project move forward, it would certainly attract foreign investors to Vietnam. The problem is that there's not enough quality companies," he said. Reuters