2026-03-03 03:13Summary of EEMEA Equity Strategy Conference Call Industry Overview - The analysis focuses on the EEMEA (Eastern Europe, Middle East, and Africa) equities, particularly in the context of geopolitical tensions in the Middle East over the past three years [1][2][11]. Key Insights Sensitive and Resilient Equities - Sensitive Equities: Egypt and Turkey are identified as the most sensitive equities due to their proximity to conflicts and economic dependencies. Egypt is a net oil importer and relies heavily on tourism and the Suez Canal [3][19]. - Resilient Equities: South African gold miners and Central and Eastern European (CEE) refiners are noted as resilient sectors. The resilience is attributed to a global flight to safety and tighter refining product markets [4][11]. Market Performance During Geopolitical Tensions - Historical data indicates that MENA equity drawdowns during geopolitical tensions average around 5% in both absolute and relative terms compared to emerging markets (EM). Markets typically recover within 1-3 weeks [5][15]. - Recent declines since the US-Israel-Iran situation began include: Saudi Arabia (-2.1%), Egypt (-5.6%), Qatar (-4.3%), and Kuwait (-2.1%) [5][21]. Sector Performance - The most resilient sectors identified include Energy, Petrochemicals, Consumer Staples, Telecommunications, and Utilities. However, Energy and Petrochemicals remain vulnerable to disruptions in the Strait of Hormuz [3][4]. Stock Performance Analysis - A detailed stock screen was conducted, identifying the top 40 most sensitive and resilient stocks in EEMEA. The analysis included performance metrics such as market capitalization and average daily trading volume [12][14]. - For instance, Talaat Moustafa Group (Egypt) and Jabal Omar (Saudi Arabia) are among the most sensitive stocks, with performance declines of -16% and -15% respectively since February 19, 2026 [12]. Historical Context - The Gulf War (1990-91) saw a significant decline of approximately 13% in Middle Eastern equities, which remained range-bound until the conflict resolution. Current sell-offs are noted to be less severe and more contained [5][15]. Additional Important Points - The UAE equity markets are set to reopen on March 4, 2026, and are particularly exposed to potential de-risking flows due to their status as the most owned MENA market among global emerging market funds [3]. - The analysis emphasizes that while the recent past provides insights, the fluid nature of geopolitical conditions means that risks may not be fully captured by historical data [2]. Conclusion - The EEMEA equity landscape is significantly influenced by geopolitical tensions, with varying impacts on different countries and sectors. Investors are advised to consider both sensitive and resilient stocks when navigating this complex environment.