HÀ NỘI — The Vietnamese stock market experienced volatility in November, with major indices on the Hồ Chí Minh Stock Exchange (HoSE) declining slightly. 

However, amid the broader market downturn, the information technology (IT) sector emerged as a standout performer, recording impressive growth both in November and year-to-date.

The VN-Index closed November at 1,250.46 points, down 1.11 per  month-on-month, while the VNAllshare and VN30 indices saw declines of 1.69 per cent and 2.04 per cent, respectively. 

Despite this, the IT sector index (VNIT) posted a robust 6.07 per cent gain for the month, significantly outpacing all other sectors. By contrast, the consumer goods, energy and materials sectors saw notable declines of 5.3 per cent, 4.57 per cent, and 1.48 per cent, respectively.

Year-to-date, VNIT has surged 68 per cent, far exceeding the 10.67 per cent growth of the VN-Index and outperforming other strong sectors like consumer goods (up 29 per cent) and healthcare (up 23 per cent). This aligns with global trends, where technology stocks have been a focal point for investors.

In the blue-chip group, FPT of FPT Corporation led the rally, up nearly 74 per cent in 11 months, propelling the company to the third-largest market capitalisation on HoSE. It was up from tenth at the start of the year. 

It has also been a favourite among foreign investors during recent periods of net buying.

Listed on the Hà Nội Stock Exchange (HNX), Viettel Global Investment JSC (VGI) has seen a 250 per cent increase in its stock price this year, underscoring the broader appeal of tech stocks across Việt Nam’s exchanges.

Industry fundamentals support growth

Vietnamese IT companies have benefited from strong financial performance, with most reporting significant profit gains in the first nine months of 2024, a report from Tiền Phong Securities JSC showed. 

Notably, VGI’s profit after tax surged 343 per cent year-on-year, while FPT maintained its leadership in revenue, profitability and profit margins.

Other IT and telecom firms, such as SAM Holdings (up 234 per cent) and Việt Nam Technology & Telecommunication JSC (up 158 per cent), also recorded extraordinary growth.

The sector’s growth is underpinned by the country’s accelerating digital transformation and increasing demand for IT outsourcing. 

According to the report, Việt Nam’s IT service market is projected to reach US$1.99 billion in 2024 and grow at a compound annual rate of 9.34 per cent to $3.11 billion by 2029. 

IT outsourcing is expected to dominate, accounting for 35 per cent of total market revenue in 2024.

Việt Nam’s IT and telecom sector is poised to benefit from emerging technologies such as artificial intelligence (AI), the Internet of Things (IoT) and blockchain. 

Investments in 5G connectivity, edge computing, cybersecurity and data analytics are expected to drive growth further.

Foreign direct investment (FDI) will also play a pivotal role, according to experts. 

Việt Nam’s competitive labour costs, improving infrastructure and inclusion in major free trade agreements (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Việt Nam - EU Free Trade Agreement) make it an attractive destination for global tech firms. 

The country’s strategic role in the China+1 manufacturing strategy has positioned it as a preferred hub for IT investment.

The Vietnamese Government has been proactive in fostering the tech sector, with policies promoting digital transformation and urbanisation.

The CPTPP and EVFTA open up numerous market opportunities and foster technology exchange for local tech businesses, while a young, tech-savvy population is driving demand for digital products and services. — VNS