In our view, the key takeaways for Vietnamese markets from Trump 2.0 are:
Short-Term Impact: Equity markets are expected to see heightened volatility. However, companies in our coverage are on “watch mode” with no immediate earnings pressures from this event. Export-oriented companies with direct exposure to potential Trump policies hold a limited weight in the VN index, meaning any downside risks from this group are not expected to significantly impact overall market performance. Local sentiment remains more optimistic, as many Vietnamese retail investors view Trump’s presidency favourably.
Medium-Term Impact: Market volatility is likely to continue under Trump’s administration. But we can divide this into 2 scenarios. In the case of extreme protectionist policies, trade activity will slow, creating secondary earnings pressures. In such a scenario, earnings growth for Vietnamese companies could decelerate from the current 16-18% range to mid-single-digit levels, impacting the broader growth outlook. A more probable scenario involves selective tariffs on specific countries or products, which could ultimately benefit Vietnam through tariff differentials with China.
Given China’s 32% share of global manufacturing versus Vietnam’s 2-3%, increased trade headwinds for China could position Vietnam to capture a larger share of manufacturing and export demand, much like it did during the previous Trump administration. This trend could further accelerate localisation efforts among Vietnamese manufacturers, enhancing Vietnam’s real economy and supporting equity markets as the shift unfolds…
