EQUITY STRATEGY GLOBAL EMERGING MARKETS Q4 2018 By: John Lomax, Herald van der Linde, Alexis Milo, Francisco Schumacher and Paul Blower https:// GEMs Equity Strategy Chinese whispers EM equities need the US to slow and China to reflate… …both should progressively happen Growth of EM middle class remains a very strong long-term driver Disclaimer & Disclosures: This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it THIS CONTENT MAY NOT BE DISTRIBUTED TO THE PEOPLE'S REPUBLIC OF CHINA (THE "PRC") (EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAO) Contents Investment strategy 2 Markets & regions: EM Asia 71 GEMs investment landscape 2 China (overweight) 72 EM equities – waiting for US cyclical India (underweight) 74 deceleration… 3 Indonesia (underweight) 76 And Chinese reflation… 4 Korea (neutral) 78 Looking at the long term; demographics Malaysia (neutral) 80 and the rise of the EM middle class 9 Pakistan (underweight) 82 GEMs equity strategy data 21 The Philippines (neutral) 84 Taiwan (underweight) 86 CEEMEA and LatAm markets overview 27 Thailand (overweight) 88 Disclosure appendix 90 Asian markets and sector overviews 30 Disclaimer 96 Markets & regions: CEEMEA 33 CE3 (underweight) 34 Greece (neutral) 39 Russia (overweight) 41 Turkey (overweight) 43 South Africa (underweight) 46 Egypt (overweight) 49 Qatar (underweight) 51 UAE (underweight) 53 Saudi Arabia (off-benchmark) 55 Kuwait (off-benchmark) 56 Markets & regions: LatAm 57 Brazil (overweight) 58 Mexico (neutral) 61 Chile (underweight) 63 Colombia (overweight) 65 Peru (neutral) 67 Argentina (off-benchmark) 69 Investment strategy 4 EM equities need the US to slow and China to reflate… 4 …both should happen gradually 4 Growth of EM middle class remains a very strong long-term driver John Lomax* Head of Globa
