EM Equities

Research evidence excerpt

EM Equities

Portfolio Strategy Research

1 July 2026 | 3:05AM BST

EM EQUITIES

2H Outlook: Broadening Gains

n Strong but narrow 1H rally. EM equities have posted an impressive 23% gain in Sunil Koul

+44(20)7051-4931 | sunil.koul@gs.com

the first half of 2026, significantly outpacing their DM peers. However, this rally Goldman Sachs International

has been concentrated in AI/tech-related pockets. The equal-weighted EM index Kamakshya Trivedi

+44(20)7051-4005 |

is up just 4% for the year. kamakshya.trivedi@gs.com

Goldman Sachs International

n Earnings remain the main driver of returns. Forward EPS estimates have risen Timothy Moe, CFA

+65-6889-1199 | timothy.moe@gs.com

40% ytd, outpacing the MSCI EM price gains, while the P/E multiple has declined Goldman Sachs (Singapore) Pte

(from 13.5x at the start of the year to 11x). We forecast strong profit growth of Tarun Lalwani, CFA

+1(212)934-5821 |

55% this year and 20% next year, and positive earnings momentum into the 2Q tarun.lalwani@gs.com

Goldman Sachs India SPL

results season, which should drive MSCI EM to 1900 by year-end and to 2000 in

Mambuna Njie

12-months, implying 17%/19% USD price/total returns. +44(20)7051-7705 |

mambuna.njie@gs.com

n Oil relief should allow a broadening out. The US-Iran agreement has reduced

tail risks for oil upside and growth downside. With many EM pockets still

meaningfully below their pre-war highs, we see room for further cyclical relief

and broadening. Oil importers such as India, Turkey and Egypt, and

rate-sensitives like Brazil and South-Africa appear best-placed. We keep our

market allocations unchanged but make sector changes to reflect the improved

cyclical baseline. We raise Banks and Capital goods to OW, and Chemicals to MW,

while downgrading Energy and Internet to MW.