EEMEA Equities Mid-Year Outlook: Seeking Resilience

Research evidence excerpt

EEMEA Equities Mid-Year Outlook: Seeking Resilience

EEMEA InsightM

Executive Summary

We remain constructive on EEMEA equities despite a more fragmented and uncertain

macro backdrop. Structural reform momentum, resilient fundamentals and differentiated

earnings trajectories continue to create selective opportunities across the region. Our

preferred markets remain in the following order: Hungary, Saudi Arabia and Greece, where

we see the strongest combination of earnings resilience, policy support and valuation

upside. Meanwhile, we move Qatar and Kuwait to relative Underweight, where we see a

less supportive growth and earnings backdrop.

Within MENA, Saudi Arabia remains our preferred market, supported by resilient

energy exports, higher for longer energy prices, improving earnings, supportive liquidity

dynamics and undemanding valuations. In contrast, we move Qatar and Kuwait to

relative Underweight. In Qatar, delays to the LNG expansion and constrained domestic

liquidity conditions suggest a softer growth backdrop, while in Kuwait's housing reform

implementation may take longer to materialise amid the regional conflict. We remain

Equal-weight UAE and Egypt. In the UAE, we continue to prefer Abu Dhabi over Dubai

given the former’s stronger sovereign linkage and energy exposure, while in Egypt resilient

corporate fundamentals continue to offset a more challenging external backdrop.

Within EM Europe, Hungary remains our preferred market following the recent

elections, where we see improving policy environment, attractive valuations and scope for

further compression in risk premia. We remain Overweight Greece, where robust

domestic fundamentals, strong investment activity and EM-to-DM transition tailwinds

continue to support our positive view.