Key Trades and Risks
CEEMEA Equity Strategy
CEEMEA Equity Strategy
Deanne GordonAC
(27-21) 712-0875
deanne.gordon@jpmorgan.com
J.P. Morgan Equities Ltd.
Peter Westin
(7-495) 967-1771
peter.westin@jpmorgan.com
J.P. Morgan Bank International LLC
Jason Swartz, CFA
(27-11) 507-0397
jason.v.swartz@jpmorgan.com
J.P. Morgan Equities Ltd.
Rohan Ghalla
(91-22) 6719-8289
rohan.d.ghalla@jpmorgan.com
J.P. Morgan India Private Limited
See page 53 for analyst certification and important disclosures, including non-US analyst disclosures.
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• Despite compelling valuation support for CEEMEA equities, we remain
defensively positioned given still significant growth risks, in particular.
• We debated upgrading Turkey given more aggressive monetary easing
prospects, but believe it is a crowded trade and we remain concerned about
earnings growth disappointments. We stay Neutral Turkey.
• In the near term, we remain UW Russia, despite very attractive valuations,
on our expectations of further Ruble weakness and likely monetary
tightening, which stands in contrast to the rest of CEEMEA where we
forecast monetary relief. We also recommend UW CE3.
• Stay OW SA given its low beta characteristics and on expected aggressive
monetary easing of c400bp (the most across EM), deep domestic investor
pool underpin and cash-flush corporate balance sheets.
• While we have missed some of the run in SA gold stocks, we believe the
risk of not having gold in portfolios outweighs attempting to optimise
timing the entry. Add SA gold stocks into pullbacks.
• Our key trades in CEEMEA:
o OW SA Retailers, Banks, Telcos, Food Producers and Gold.
o Underweight Russia energy, real estate.
o Neutral Turkey with exposure to defensives such as Telcos and
Consumer Staples.
o Underweight CE3 on developed Europe woes.
• Top stock picks: Woolworths, Firstrand, Absa, TigerBrands, Harmony,
Anglogold, BIM, Turk Telekom, Garanti.
Figure 1: Ranked betas of emerging markets to MSCI EMF

Table of Contents
CEEMEA in Recession.............................................................3
CEEMEA Model Portfolio by Country ...................................19
CEEMEA Model Portfolio by Sector......................................20
Key Trades ..............................................................................22
Key Risks ................................................................................29
Market drivers.........................................................................30
Russia: The ruble; make or break?.......................................33
South Africa: Rotating ...........................................................35
Poland: Slow, but not cheap .................................................37
Turkey: Remain defensive .....................................................39
Consensus asset allocation ..................................................42
Hindsight trades .....................................................................43
Composite valuation indicators ............................................45
CEEMEA30..............................................................................49