GEMs Best Stock Ideas September 2026

Research evidence excerpt

10 September 2026

GEMs Best Stock Ideas

Equity Strategy

Emerging Markets

September 2026

◆ We highlight 29 stock ideas across emerging markets

◆ These are our analysts’ best ideas based on their bottom-up

analysis…

◆ …and are also consistent with our top-down strategy

We remain bullish on EM equities. The final four months to the year are shaping up

as a catalyst-heavy window for EM equities, with market direction and relative

performance likely driven by country-specific policy choices, index and flow events

and the next checkpoints for the AI trade.

In Asia we continue to favor semi’s and memory and see an opportunity for Korea to

break out. Our models suggest the market has seen a strong bearish shift in market

pricing and underappreciating the longevity of the AI earnings (see AI capitulation:

what’s now priced? GEMs Equity Strategy, 3 August 2026). We also see signs the

positioning unwind is done: foreign selling across the EM tech trident totals around

USD150bn year-to-date and the AUM from leveraged single-stock ETFs, which has

amplified volatility, has collapsed. The increase in shareholder returns is another positive

catalyst. We also like to diversify within the AI-trade itself, focusing on companies that

benefit from AI bottlenecks and broadening into mainland China’s semi and tech

hardware stack which is benefiting from the government’s strategic push for localization

(see GEMs Equity Quarterly: Rotation without retreat, 15 July 2026).

We also see underappreciated themes outside of AI and see select opportunities for

performance to broaden. Earnings ex-tech has been surprisingly strong in Q2 up 22% y/y,

the fastest pace since early 2021, suggesting there is plenty of breadth. Our preferences

include recovery plays with underlying structural drivers, such as South Africa, Chile, and

parts of CEE. The risk of extended tensions in the Middle East, along with falling global oil

inventories, makes us think there is scope for energy and materials to outperform.

Alastair Pinder, CFA

Head EM and Global Equity Strategist

HSBC Securities (USA) Inc.

Pankaj Agarwala*, CFA

EM and Global Equity Strategist

HSBC Securities and Capital Markets (India) Private Limited

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