De-escalation Rotations Have Further to Run

Research evidence excerpt

De-escalation Rotations Have Further to Run

out as offering several of the more compelling catch-up escalation gains further traction

opportunities. Precious metals have come under renewed pressure as markets EEMEA De-Escalation Screens: Absolute USD Performance

(Rebased, 27 Feb = 100) MoU US signals MoU

Startpriced a more hawkish Fed path, despite our US economists continuing to expect the 130 of Iran announcementUS/Ceasefire headlinesproposal MoUis neardeal signed

conflict 120

Fed to remain on hold. Should that view play out, we see scope for a tactical 110 US/Iran in

'final

rebound in both gold and PGM miners, although we continue to prefer gold over 100 headlinesstages'

PGMs, given the latter face additional headwinds from rising BEV penetration (post 80

the surge in fuel prices) and a structurally sticky supply side (including an expected 70

rebound in recycled supply). Naspers has also underperformed amid the recent 60Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26

Tactical Outperformers Tactical Underperformers Rel. Performance

global sell-off in AI/Tech stocks, although its shares have begun to recover following

a strong earnings release. Our South Africa Equity Strategy team also has Prosus on Source: FactSet and Morgan Stanley Research

its Focus List. Outside these sectors, Pepkor - recently added to our South Africa

Equity Strategy Focus List - screens as a recovering laggard, while South African

banks have already emerged as the second-largest contributor to MSCI EEMEA

performance post de-escalation (accounting for 44% of the move).

UAE equities have recovered meaningfully but have retraced less than half of

Morgan Stanley does and seeks to do business withtheir conflict-driven decline. Lingering uncertainty around the durability of de-