United States defense contractors working to secure new military deals spoke to Vietnam’s top government officials last week, according to a report from Reuters. Lockheed Martin (LMT), Boeing (BA) and Raytheon (RTX) all attended a large-scale arms fair in Vietnam as the country seeks to become less reliant on Russia.
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The U.S. firms are in discussions with the Ministry of Public Security and Ministry of National Defense, according to those familiar with the matter, Reuters reported. The preliminary talks are “promising” but may not produce any deals. So far, the companies offered a range of supplies including helicopters for internal security, radar, drones, nonlethal equipment and other air, sea and space surveillance systems. Discussions regarding helicopters and drones began before the arms fair and involved more weapons, Reuters’ sources said.
However, the deals could face barriers. Washington may block sales over human rights. There are also concerns about the impact it will have on Vietnam’s tense relations with China. In addition, it’s unclear if the U.S. systems from Lockheed Martin and others can integrate with Vietnam’s legacy weapons, according to analysts that spoke with Reuters.
Russia Dominates Vietnam Arms Sales
At the sidelines of the arms fair, U.S. Ambassador to Vietnam Marc Knapper said it “represents a new stage in Vietnam’s efforts to globalize, diversify and modernize, and the United States want to be a part of it.”
The industry’s US-ASEAN Business Council arranged the meetings during the arms fair, which featured dozens of defense companies from 30 countries. All of them are vying for the $2 billion Vietnam spends on imported arms annually — only a drop in the bucket compared to America’s defense budget.
Russia supplies about 80% of its arsenal. Israel has been Vietnam’s second-largest arms supplier over the last decade. Reuters’ sources said Vietnam was also considering deals with Israel, India, Europe and northeast Asian suppliers.
In 2021, Vietnam’s trade surplus with the United States leapt 28.6% to $81 billion, according to government data. America is Vietnam’s largest export market. The country’s exports to the U.S. rose roughly 25% to $96.3 billion last year.
Futures: Nasdaq Breaks Key Level; Here’s The Silver Lining
Lockheed Martin Stock Below Buy Point
Lockheed Martin shares dropped 1.8% Thursday, cutting just below support at its short-term 21-day exponential moving average. The stock has been dodging over and under a 480.09 buy point in a nine-month cup base.
Boeing stock slipped 3.4% Thursday, holding support at its 10-day line, at the top of a 5% buy range above a 173.95 buy point. RTX shares slumped 2%, pulling back below a 98.12 entry in a cup-with-handle base.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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