Feb 19, 2012

Vietnam - IT attractive to foreign investors



Foreign information technology firms and investment funds are interested in venturing into Vietnamese IT and software development companies.

This was what shared by many businessmen, investment consultants and managers at the Super Investors Day 2012 held in HCMC on Thursday.

Chu Tien Dung, chairman of Quang Trung Software City Development Co. Ltd., said many foreign IT and software development firms were planning to expand to Vietnam and seeking partnerships with local software enterprises.

Speaking to the media on the sidelines of the event, he said most foreign investors chose to take over Vietnamese firms to enter the local market. Therefore, he predicted, mergers and acquisitions (M&A) would be busier in the local IT industry and investors seemed to prefer small businesses.

Foreign investors seeking to buy into Vietnamese companies are only interested in the local market and available human resources. They are willing to change the names of the companies they acquire and transfer technology to them for quick business resumption, instead of investing in new firms.

Dung noted this trend helped shorten M&A talks. For instance, Japanese investors were formerly very prudent and only began their investment after 2 or 3 years of surveying the local market, but now a survey only takes about six months.

Nguyen Tat Thang, chief economist at HSC Company and an investment consultant, said the IT sector is appealing to foreign investors, especially those from Japan.

Vietnam’s IT industry is still underdeveloped, Thang stressed, notably the development of database and management systems of certain sectors like finance, distribution and healthcare. Therefore, foreign investors want to invest in Vietnam through M&A deals to tap this market.

David Do, managing director of Vietnam Investments Group (VIG), shared the view that there is a big opportunity to invest in Vietnam’s IT market. He said that in developed economies like the U.S. and European nations, IT accounts for some 7 per cent of gross domestic product (GDP), while the figure in Vietnam is less than 2 per cent.

E-commerce is also considered attractive to investment funds, David added, as Internet services are growing strongly in Vietnam. The Super Investors Day 2012 was organized by Doanh Nhan magazine in coordination with Vinabull, Le Bros and InfoTV Channel with the participation of 20 economists and businessmen as speakers on the topic of investment opportunities and outlook for Vietnam in 2012.

thesaigontimes



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