Goldman Sachs Continue to See Asia Offering Largest Upside in EM This Year

Goldman Sachs latest on EM equity markets:

• They write that China's re-opening has catalyzed a bout of growth upgrades and a strong start to the year for EM, however EM ex-China has not yet outperformed DM peers.
• They update their MSCI EM index call, seeing 1150 (+9%) over the next twelve months. In terms of regions, their view remains unchanged, with Asia offering the largest upside (11%) and Latin America the least (+4%).
• They add that MSCI EM's underperformance of last year was concentrated in North Asia, and they expect a rotation into that region in 2023.
• GS remain encouraged by the 15% return posted by Korean equities year-to-date, and see Korean equities as a coherent macro investment vehicle that rise in value more reliably than European equities, US HY credit, and commodity prices when the USD weakens.