AI 'Scare Trade' Takes Hold; Talabat FY Earnings | Horizons Middle East & Africa 2/13/2026

Horizons: Middle East & Africa - Broadcast Summary (February 9, 2024)

Key Concepts:

• AI Sell-Off: Market downturn driven by concerns about industries vulnerable to disruption from Artificial Intelligence.
• Risk-Off Trade: Investor shift towards safer assets (fixed income, gold – initially) amid market uncertainty.
• US-Venezuela Energy Cooperation: Potential for increased US private sector involvement in rebuilding Venezuela’s oil sector.
• Emerging Market Performance: Outperformance of Asia-Pacific and select African markets relative to the US.
• Dubai Luxury Property Boom: Continued growth in the ultra-luxury real estate segment driven by high-net-worth individuals.
• Geopolitical Risk: Concerns surrounding the Ukraine war and potential shifts in transatlantic relations.

1. Market Overview & AI Impact (0:00 – 1:30, 8:30-9:00, 10:00-10:30)

The broadcast opened with a negative session on Wall Street (S&P down 1.6%, NASDAQ down 2%, Apple -5%, Meta -3%, Amazon -2%) fueled by an “AI scare trade.” Industries perceived as vulnerable to AI disruption, particularly logistics (US Trucking Index experienced a significant price drop), are suffering. While stabilization is occurring, CPI data later today is a key market mover. 10-year yields slid 8 basis points amidst the risk-off environment, but gold initially sold off despite its safe-haven status, potentially due to margin calls and portfolio rebalancing. Asian markets mirrored the negative sentiment, with the MX AP Index pulling back and the CSI 300 down 0.7%. However, the KOSPI showed resilience, driven by hardware-focused tech stocks.

2. Investment Strategy & Economic Outlook (1:30 – 3:30)

T. Rowe Price’s Chief Investment Officer, Sébastien, discussed the shift from focusing on AI beneficiaries to identifying “AI victims.” He advocated for a “barbelling” strategy – investing in growth stocks that have come down and underweighting stocks that have already benefited from the AI boom. He highlighted the strength of the US economy (nominal growth around 7%) and the US administration’s commitment to maintaining growth leading up to the election. He also noted the potential for small caps to perform if short rates decline, emphasizing a “Goldilocks” scenario of moderate growth and limited rate cuts. He pointed out historically high market concentration and advocated for diversification, particularly into non-US value stocks. A breakdown in the correlation between US and Asia-Pacific markets was noted, attributed to better relative valuations and accelerating earnings growth in Asia.

3. Regional Economic Updates (3:30 – 4:30, 16:00-17:00, 18:00-18:30)

• Venezuela: The US is considering allowing Chevron and Repsol to expand oil production in Venezuela, with the US Energy Secretary expressing optimism about cooperation with Venezuela’s acting president. The US is selling Venezuelan oil, directing funds to the government, and releasing licenses for oil companies to invest.
• South Africa: President Ramaphosa pledged to accelerate reforms to boost growth and attract investment, focusing on infrastructure and stabilizing debt. The restructuring of Eskom (the national electricity company) is underway, with the creation of an independent power transmission company.
• Ghana: Revamping its cocoa pricing system, reducing prices to farmers by nearly 30% to align with international markets.
• Congo & Zambia: Congo returned to the Eurobond market, receiving over $2 billion in orders. Zambia saw increased foreign investment in its local bond market after lifting restrictions on non-resident participation.
• Oman: Omani stocks experienced their best day in a decade, driven by hopes of inclusion in emerging market indices.

4. Talabat Earnings & Future Strategy (10:30 – 13:00)

Talabat CEO Toon Gysels reported full-year adjusted profit of $451 million (a 15% year-on-year increase) and plans to invest $100 million in growth, particularly in grocery and new verticals. He emphasized a shift towards becoming an “everyday app” beyond food delivery. Competition from companies like M-1 is impacting the lower-value segment, but Talabat’s high-value customers remain loyal. The company is prioritizing subscription programs and ecosystem development. Gysels acknowledged the stock’s discount to peers, attributing it to short-term vs. long-term investment priorities.

5. Geopolitical Concerns & Transatlantic Relations (13:00 – 15:00)

The US is weighing plans to roll back aluminum and steel tariffs, potentially impacting the metals market. A trade deal between Washington and Taipei was finalized, cutting tariffs on US products in Taiwan, with Taiwan pledging $44 billion in US energy purchases. President Trump continues negotiations with Iran, warning of consequences if a deal isn’t reached. The situation in Ukraine is critical, with allies pledging $35 billion in military aid, particularly for air defense. Bloomberg’s Oliver Crook reported from Munich, highlighting concerns about a potential shift in US foreign policy under a new administration and the need to reassess transatlantic alliances.

6. Dubai Luxury Property Market (15:00 – 17:00)

Dubai’s ultra-luxury property market (homes $10 million+) continues to boom, with 500 transactions last year. The influx of high-net-worth individuals from Russia, Ukraine, the UK, and other European countries is driving demand. While concerns about oversupply exist, developers are confident that capacity constraints and continued immigration will prevent a significant correction. The market is two-tiered, with strong demand at the high end and stabilizing rents in the wider market.

Notable Quotes:

• Sébastien (T. Rowe Price): “We are moving from the trade where everyone is interested in AI buildout to everyone is talking about the AI beneficiaries that will have huge productivity gains to the AI victims.”
• Sébastien (T. Rowe Price): “The economy in the U.S. is looking pretty good. It is on a nominal basis, probably growing at 7%. That’s higher than any calendar year between the Great Financial Crisis and COVID.”
• Chris Wright (US Energy Secretary): “We see smiles on Venezuelans’ faces. We see local businesses optimistic about their future, talking about a return flow of Venezuelans.”
• Toon Gysels (Talabat CEO): “Talabat will become an everyday app.”

Data & Statistics:

• S&P 500 down 1.6%, NASDAQ down 2% (yesterday)
• Apple down 5%, Meta down 3%, Amazon down 2% (yesterday)
• 10-year Treasury yield slid 8 basis points.
• Talabat’s full-year adjusted profit: $451 million (up 15% YoY)
• Talabat plans to invest $100 million in growth.
• Grocery growth at Talabat: 48% year-on-year.
• Dubai luxury property transactions (>$10M): 500 in 2023.
• Ukraine military aid pledged: $35 billion.

Conclusion:

The broadcast highlighted a complex global landscape characterized by AI-driven market volatility, shifting geopolitical dynamics, and regional economic variations. While concerns about a potential recession linger, certain markets (like parts of Asia and the Middle East) are demonstrating resilience. The focus on emerging markets, the US-Venezuela energy partnership, and the continued growth of the Dubai luxury property sector represent key trends to watch. The evolving transatlantic relationship and the ongoing conflict in Ukraine remain significant sources of uncertainty.