Biannual Strategy: Flexing the Bamboo
Vietnam was particularly exposed to initial US tariffs. It needs to show all of its core traits of resilience, cultural togetherness, bravery and shrewd negotiation to improve its position. One suspects that the bamboo of its famous diplomacy will be flexed to almost breaking point between the needs of the US and China.
We forecast an average tariff rate of 23.4% following negotiations, affording a GDP growth of 6.5% this year and 6.2% in 2026. This will likely be the best in Asia.
Our new one-year index target is 1,512 with good stock picking opportunities. Indeed, the potential for better-than-expected tariff negotiations and a September FTSE Russell EM upgrade could lead to euphoria beyond that level.