Equities in emerging markets have staged a stronger rebound than their global peers in April amid the optimism sparked by a two-week ceasefire deal between the US and Iran. Risk sentiment has stayed strong as the two sides are said to consider further extending the temporary truce. The MSCI Emerging Markets Index is up almost 15% so far this month, versus a gain of less than 9% for a gauge of world stocks.
“We remain constructive overall as valuation and positioning had reset meaningfully,” the Goldman analysts wrote, referring to EM stocks. “Underlying profit growth is likely to be strong, with 16 percentage points of our 23% MSCI EM 2026 earnings growth forecast driven by AI-related demand, which should be relatively insulated from the direct impacts of the oil shock.”
Outside of Asia, the analysts prefer Brazil due to “commodity tailwinds,” and favour South Africa for its “inexpensive valuations.”
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