12 May, 2026

Positive earnings and resilient valuations reinforce the investment case for emerging markets

Summary

Highlights

EM equities have held up despite the Iran war, helped by strong earnings growth and the rally in the technology sector.
Earnings growth underpins EM resilience, and the region is attractively priced compared to developed markets and offers diversification opportunities.
Latin America stands out favourably, given its energy exports, strong fundamentals and its distance from the conflict region.

Line chart comparing 12-month earnings growth expectations for emerging and developed markets from 2023 to 2026. Growth accelerates sharply in emerging markets, with a steep rise in early 2026, while developed markets follow a more moderate upward trend.

In this edition

Earnings growth expectations have been improving across the emerging world, which remains a diverse universe of opportunities. Although the crisis in the Middle East caused initial volatility, at a broader level, the region seems to have recovered well. The situation remains fluid, but we see substantial long-term opportunities. For instance, in EM Asia, South Korea is one of the most attractive markets, supported by strong earnings momentum, AI-driven memory demand and governance reforms. China, however, faces a less supportive earnings backdrop. While we have a positive long-term view on India due to robust economic growth, solid earnings and reasonable valuations, near-term uncertainty could persist because of the crisis. Latin America, as an exporter of energy, offers a positive backdrop, supported by natural resources, central bank flexibility and some AI-related upside. Brazil’s outlook is constructive, but we are monitoring inflation, government debt and the 2026 election. Overall, we remain constructive on EM, particularly in Latin America and Asia.

* Diversification does not guarantee a profit or protect against a loss.

Key dates

12 May

CPI: US, Brazil, India; EZ Zew Survey

13 May

EZ industrial production, Brazil retail sales

14 May

US retail sales, US labour market, UK GDP

Read the full article on the Amundi Research center

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