EM Weekly Kickstart MSCI EM closed flat w w amid rate oil risks

Portfolio Strategy Research 4 September 2026 | 6:32PM BST

MSCI EM closed flat w/w amid rate/oil risks; Brazil rallied 6% with pick up in Options/ETF activity; We expect Further Index Upside and Broadening in EM into the year-end

n Performance: MSCI EM was flat w/w (+0.3%) with gains rebound given clearer signs of a growth uptick. The Sunil Koul | in Brazil (+6%) and Colombia (+6%) and declines in recent recovery in South Africa could extend given its Goldman Sachs International

Turkiye (-3%), Hungary (-3%), and Saudi Arabia (-2%). large gold-mining sector exposure. More broadly, while Tarun Lalwani, CFA |

n Earnings/valuations: MXEF is trading at 9.7x fwd. P/E US yields have risen and energy volatility persists, a Goldman Sachs India SPL

(-2.3 s.d, 10yr avg). EM 2026E EPS revised +0.2% w/w. resilient growth backdrop and a weaker US Dollar have Mambuna Njie contained the broader market impact. If rates | n Flows: EM equities saw foreign outflows of US$4.7bn led moderate from here, as per our baseline views, and Goldman Sachs International by Taiwan (-US$2.4bn), Korea (-US$1.8bn) and India Shuyi Fang energy flows normalize, rate-sensitive pockets that | (-US$0.5bn), while Brazil (US$0.2bn) saw inflows. Goldman Sachs International have recently lagged (real estate, discretionary, SA domestics, long-duration stocks) could see a relief rally. Focus: Further EM Gains, Near-term Risks; Brazil Rally Conversely, a prolonged conflict could trigger a spike in n EM Equities: Higher, Broader, with Near-Term Risks: gas prices, leaving CEE equities especially vulnerable MSCI EM has re-couped two-thirds of its July drawdown going into winter (See School’s Back, More Upside in August, with a further broadening in non-tech cyclicals Ahead for more details). — pushing the eq-wgt. EM index 5% higher. As we highlighted in the EM Trader, we expect further gains, n Brazil Rally in Context: After the 1H round trip, albeit with a few near-term risks. Strong underlying Brazilian equities have rallied strongly over the past two profit growth (65% this year, 20% in 2027E), low weeks with MSCI Brazil/Bovespa up 12%/11% since aggregate valuations (at a 10x fwd. P/E) and relatively Aug 18th low. Gains have been broad-based across cleaner positioning should allow further upside towards sectors, led slightly by rate-sensitives. The rally has our MSCI EM year-end target of 1,900 (+12%). been supported by foreign inflows — +US$1.1bn net buying since Aug lows. EWZ (MSCI Brazil ETF) saw net n We continue to favour balanced allocations between unit creation this week, first time since April this year. North Asian tech and non-tech markets elsewhere. Also, open interest in EWZ Call Options hit record levels Beyond the AI complex, we expect laggard India to

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Goldman Sachs EM Weekly Kickstart

(crossing 5mn). Implied vols have also picked up as we head closer to elections in line with prior cycles. That said, the recent rally has brought ytd gains in Bovespa in line with our macro model and domestic valuations now appear ‘fair’ relative to the level of rates. We think further equity gains will need more clarity around elections and commitment to fiscal discipline to be sustained, particularly given softer activity data.