Donald Trump’s possible re-election could drive growth in emerging market equities in the Middle East and North Africa (MENA) region due to a stronger U.S. dollar, rising U.S. bond yields, and anticipated global trade policy changes, according to a J.P. Morgan report released Tuesday.
“We favor MENA markets with currencies pegged to the dollar over regions with emerging market FX exposure in Central and Eastern Europe, the Middle East, and Africa (CEEMEA),” noted analysts led by David Aserkoff at J.P. Morgan.
For the CEEMEA region, two primary uncertainties affecting equities in 2025 include U.S. tariff policies and China’s economic stimulus measures.
Trump’s recent sweeping election victory has placed a spotlight on his campaign commitment to impose tariffs of over 60% on Chinese imports.
According to J.P. Morgan, these tariffs could strengthen the U.S. dollar and push bond yields higher, positioning the MENA region to benefit from these trends. Increased tariffs could also redirect cheaper Chinese exports into other global markets, further impacting trade dynamics.
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The MENA region is expected to benefit most, as it lacks a large manufacturing sector that would compete directly with Chinese imports, unlike other CEEMEA nations like Poland and Turkey, which could face negative impacts from increased Chinese trade flows, J.P. Morgan observed.
Additionally, J.P. Morgan upgraded its rating on Greek equities to “overweight,” citing solid economic growth and robust quarterly earnings.
The brokerage maintained an “overweight” position for South Africa and the UAE, upheld a “neutral” rating on Saudi Arabia and Turkey, and reaffirmed an “underweight” stance for Poland.
