Viet Nam Limits State Company Investments in Finance

Vietnamese Prime Minister Nguyen Tan Dung issued instructions aimed at limiting government-owned companies' ability to invest in financial markets.

Under the guidelines, state companies must ensure that any investments in Vietnam's securities markets do not affect production or sales, according to the newspaper. The use of state company funds for direct investment in securities firms has also been restricted.

Vietnam is focused on re-establishing investor confidence in the country's stock markets, Dung said in his directive. Under the guidelines, the Ministry of Finance is responsible for setting a monthly plan to ensure a balance between supply and demand in securities markets.

Vietnam's government should send ``a clear signal that the expenditure and borrowing by state-owned enterprises, especially the larger conglomerates, is being reined in, their investment projects prioritized, and their operations limited to their core business,'' the International Monetary Fund said this month.