UBS On-Air: Market Moves Top of the Morning: Emerging Market Equities - Positioning update & outlook
5 snips
Oct 21, 2025 Explore the exciting landscape of emerging market equities with insights on performance updates and outlooks. Discover the driving factors behind the recent upgrade, including tech leadership and macroeconomic support. Learn about the valuation dynamics and earnings momentum that make EMs appealing. Delve into the specific upgrades for Mainland China and the tech sector, driven by innovations in AI and semiconductors. Finally, uncover investment opportunities in India, Brazil, and Indonesia, along with key risks to watch out for.
AI Snips
Chapters
Transcript
Episode notes
Tech-Led Shift Drives EM Outperformance
- Emerging market leadership reflects a shift to tech-heavy sectors like IT, consumer discretionary, and communication services.
- Global liquidity, tech momentum, and resilient domestic growth together powered EM outperformance this year.
Watch Monetary Tailwinds For EM Flows
- Expect Fed rate cuts and a softer U.S. dollar to improve EM financial conditions and attract flows.
- Monitor local central banks' room to ease, which can further support EM growth and stability.
Valuations Reflect Earnings Momentum, Not Overheat
- EM valuations have risen to about 14x earnings, near their 5–10 year averages, yet remain discounted versus developed markets.
- Sustained earnings momentum into 2026 is key to justify and sustain current valuation levels.