Stocks of technology companies are selling very well in the Vietnamese stock market.
If you regularly observe the list of world's billionaires, you will see that most of them got rich from technology and this trend has been increasing in recent years.
According to Forbes' ranking of the world's richest people, 7 of the 10 richest people on the planet are founders of technology corporations. Among the 50 richest people in the world, technology billionaires account for 32%, far ahead of other fields such as finance, food or media.
More than 10 years ago, Dr. Tran Du Lich, then a National Assembly deputy, when commenting on the Land Law, sadly said that most billionaires in Vietnam all came up from real estate, meaning they used national resources to get rich.
However, the current list of the richest individuals and businesses in Vietnam has more names in the field of technology such as Vingroup billionaire Pham Nhat Vuong, FPT head Truong Gia Binh, Mobile World head Nguyen Duc Tai…
Billionaire Pham Nhat Vuong - the richest person in Vietnam with a fortune of $8.5 billion - is turning his attention to the technology field.
In Vietnam, billionaires have been taking the first steps in the field of technology. Recently, thecFLC Group of Trinh Van Quyet, or most recently, VICOSTONE. a construction materials company of Ho Xuan Nang, have announced plans to invest in smart cars.
The rapid wealth of tech billionaires reflects the attraction of technology stocks in the market.
Hot tech stocks
The explosion of IT and the 4.0 era are creating momentum for the development of tech-companies. In the top 10 stocks with the largest market capitalization in the world, technology stocks account for the six leading positions.
The most popular technology stocks today include AAPL (Apple), MSFT (Microsoft), AMZN (Amazon), FB (Facebook), GOOGL (Alphabet) and BABA (Alibaba).
The outbreak of the Covid-19 pandemic has made technology companies even more attractive. Since early 2020, technology stocks have been a bright star on the US stock exchange.
While companies in other sectors have had to struggle to survive, companies in the technology sector have posted positive growth numbers amid the economic downturn caused by the Covid-19 pandemic.
Among the top tech stocks, Apple's stock price has grown 2.2 times in the past year. Positive parameters were also recorded with shares of Microsoft (up 1.8 times), Facebook (up 2.1 times) or Google (up 2.1 times).
This steady growth has made global investors increasingly confident in technology companies' stocks. This takes place in the context of the world facing many risks from non-traditional threats.
Vietnamese technology stocks
Shares of technology giants such as Facebook, Microsoft, and Alphabet are always sought after by many investors. The trend of digital transformation is an opportunity for Vietnamese technology firms to take on a big mission and go global.
In Vietnam, many people have not forgotten the period 2006 – 2007 - the golden age of FPT stock. At that time, the founders of FPT group were also the richest people on the stock exchange.
However, it is unfortunate that Vietnamese technology companies are not creating an impact as great as global technology corporations.
Among listed technology firms, there are only a few notable names such as FPT (FPT JSC), CMG (CMC Technology Corporation), ABC (VMG Media JSC), YEG (Yeah1 Group), ADG (Clever Group JSC), ICT (Post Telecommunications – IT JSC, CTIN), and MFS (MobiFone Technical Services JSC).
On the stock market, except for FPT, which has a liquidity of up to millions of units per trading session, the remaining technology stocks have average liquidity (about a few hundred thousand units traded each session).
The reason is that most stocks of technology companies are traded on UPCOM. The transparency of UPCOM is lower than that of HOSE and HNX, while the fluctuation range is much larger (±15% of UPCOM compared to ±7% of HOSE and ±10% of HNX).
In the eyes of investors, Vietnamese technology companies are not necessarily recognized as real tech firms because the number of their technology assets (patents) is not high.
In addition, business efficiency, internal resources and sensitivity of domestic technology enterprises have not been highly appreciated. This fact has caused many investors to be cautious when investing in technology stocks.
FPT is the most successful Vietnamese technology company on the stock market with a consistently high price for its shares.
Digital transformation and Vietnam's direction
Digital technology, digital transformation, digital economy, and the digital era will be a global trend and an irreversible process. With the emergence of the industrial revolution 4.0, the world is at the breakthrough point for the digital transformation process.
According to IDC, investment in direct digital transformation will increase in the period 2020 - 2023, expected to reach $6.8 trillion as many companies are taking advantage of technology to become future digital businesses. IDC forecasted that by 2022, 65% of global GDP will come from digitization.
Vietnam has set the goal that by the end of 2022, 70% of organizations and businesses will accelerate their digital transformation, transform existing operational processes in order to enhance customer interactions, improve labor productivity, and enhance their resilience.
The Covid-19 pandemic has contributed to an increase in consumer demand for technology products and online services. Therefore, stocks of Vietnamese technology companies are becoming more attractive.
In the past year, the price of FPT shares has increased 2.1 times, from VND37,400 per share in mid-March 2020 to VND79,600 at present. The price for CMG shares of CMC technology group has risen by 1.58 times, from VND23,000 to VND36,400 per share.
Compared to other strong stocks such as VJC of Vietjet Air (up 1.37%) and VNM of Vietnam Dairy Products Joint Stock Company (up 1.33 times), technology stocks had a high growth rate in the past year.
With pressure from the National Digital Transformation Program and the self-demand of people and businesses, the development of digital transformation and solution packages is considered to be the driving force for the growth of tech firms for years to come.
In that context, stocks of tech firms in Vietnam will become more attractive in the eyes of investors.
Techcombank shares (TCB) of billionaire Ho Hung Anh have been increasing in price. Forbes estimates that Anh now has $2 billion in stock assets. Other recent developments of the country's wealthy:
The stock market has been witnessing unprecedented cash inflow so far this year, even though the Covid-19 pandemic has become more complicated in Southeast Asia.