- Vietnam could be a "winner" if a lot of foreign direct investment shifts into the country due to rising cost pressures from the U.S.-China tariffs, said Bill Stoops of Dragon Capital.
- Stoops said the Vietnamese dong has "a very sound macro underpinning," and will unlikely be impacted as heavily as other emerging market currencies.
Vietnam could potentially benefit from the escalating China-U.S. trade war even as Washington continues to threaten Beijing with more tariffs, according to one investor.
The Southeast Asian nation could be a "winner" if a lot of foreign direct investment shifts into Vietnam due to rising cost pressures from the U.S.-China tariffs, Bill Stoops, the chief investment officer of Dragon Capital, told CNBC on Tuesday.
"Even China might start to shift a lot more of its production to Vietnam," Stoops said, so long as the move is not "zapped" by U.S. President Donald Trump.
"This is the sort of trend we could see," he added.
Vietnam is unlikely to be a target in the trade war, despite having a $40 billion trade surplus with the U.S., Stoops said. For Washington, it is "all about bashing China" for geostrategic and commercial reasons, he added.
Stoops said Vietnam's exports to America were "too low-end for the U.S. to even care."
A currency with 'very sound macro underpinning'
Recent weeks have seen emerging market currencies taking a hit over fears of contagion from crises in Turkey and Argentina, with the Indonesian rupiah among the hardest hit, falling to a two-decade low against the dollar in early September.
Asked if the jitters could hit sentiment on Vietnam, Stoops said the country's currency, the dong, has "a very sound macro underpinning." He said the country held "very substantial" foreign exchange reserves and has a net positive in areas such as its current account — the flow of goods and services and investments in and out of the country.
In the event that the U.S. Federal Reserve increases rates by a 100 to 125 percentage points over the next 12 months, the dong would be "fine," he said.
The strength of the dong is in part due to locals being "happy with the way the currency is being managed," Stoops said.
He explained that volatility in the currency "might force Vietnam's hand" but would not necessarily be due to internal problems within the country.