In its emerging markets survey released on Friday, US investment bank Morgan Stanley raised its recommendation on Israeli domestic equities to "Overweight", but cut its recommendation for Israel Tech to "Neutral".
The analysts at Morgan Stanley Equity Research say that the Israeli market is "the cheapest on a forward, risk adjusted basis," adding "We are thinking that the market will move back to an 'ERP and value' based framework as a correction, as opposed to the 'IRR and growth' theme that has driven market since October."
As far as emerging markets in general are concerned, Morgan Stanley recommends reducing exposure, and downgrades Turkey and South Africa Materials to Underweight", although Russia's "Overweight" rating remains.
Two weeks ago, Deutsche Bank downgraded its rating for the Israeli market to "Underperform", while UBS came out with a "Neutral" rating.
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