• February 2022 - February 2026, strangely familiar

• Dear B,

• If,

Market Review

February 2022 - February 2026, strangely familiar

The last few days have brought a clear return of “risk-off”, marked in particular by a capitulation-style session in Korea and Europe’s underperformance. This fits a brutal unwind of the most crowded trades, with money rotating back into US stocks seen as safer and better shielded geopolitically.

Samsung and the slide in Korean semiconductors

The KOSPI had a “Black Tuesday” yesterday, down 7.2%, with heavyweight names leading the drop, SK Hynix (-11.5%) and Samsung Electronics (-9.9% at the close, with even lower prints intraday). That move has wiped out part of a year-to-date rally of more than 30%.

The move is, first and foremost, technical: heavy profit-taking after an AI and memory-chip-led rally. Foreigners sold more than KRW 3,000bn in a single morning (over KRW 10,000bn across two days).

Layered on top is the risk of a US–Iran escalation, with fears of logistical disruption (shipping routes, cargo insurance), higher energy costs for a very energy-intensive sector, and renewed volatility in the AI/memory cycle. That volatility is already being fed by warnings about a 100% rise in DRAM/NAND prices, which could threaten end-demand in smartphones and PCs.

The logic behind rotating out of Europe

There are two ways to read this: a geographic rotation and a thematic rotation.

The pro-Europe case in recent weeks was straightforward: attractive valuations (P/E around 15x versus roughly 22x for the S&P), less AI/mega-cap tech exposure, and more value, financials, and industrials. That same profile turns into a handicap when:

• The region is on the front line of an energy shock,

• Banks and cyclicals become the primary source of de-risking in a macro stress episode,

• Political visibility is seen as weaker (Ukraine, energy, US trade policy).

Why money is retreating to the US (and not to Europe)

The US is still perceived as “quality core”: deep markets, the dollar as a haven, a higher weight in less energy-intensive sectors (software, services, healthcare), and a stronger ability to pass through cost increases.

On the AI theme, the market had started to diversify away from US mega-tech into Korean/Asian semis, European equipment makers, and so on. The current sell-off is, in part, a “de-diversification”:

• Cut peripheral exposures (Korea, European cyclicals, exporters),

• Keep the portfolio core names, often US, even if expensive, on the grounds of liquidity and visibility.

Few numbers

• Around 80–85% of Iranians have internet access, and over 95% of university graduates are online, despite shutdowns and tight state surveillance.

• Although the country’s centre is arid, the Hyrcanian strip can receive up to 1,500 mm of rain a year, as much as parts of Atlantic Europe, a sharp contrast with the dry central plateaus.

• Agriculture absorbs over 90% of the water used in Iran, with some of the lowest productivity levels in the region, feeding into a structural water crisis.

Editorial

Tehran, 2 March 2026

Dear B,

In my room, the recent strikes on Tehran arrived like a distant storm. The windows barely shook, but my phone crackled to life: videos of smoke over the city, rumours of hundreds killed in Minab, panicked messages squeezing through between two internet cuts. I pull my scarf back on in front of the mirror, more out of habit than conviction. I’ve worn it every day of my life. War, I knew from my parents’ stories; the protests, I lived through in January. Today, I no longer know if I’m living through a failed revolution or the beginning of something else.

Around the dinner table, we speak in low voices. My father followed the early‑January protests hour by hour, when millions of people took to the streets across the country and the repression was so violent that some speak of the worst bloodshed since 1979. Amnesty described live rounds fired into crowds, children arrested, people who disappeared and were never heard from again. “Do you remember,” he says to me, “those two days when we really thought it might tip over?” I remember it as a cold knot in my throat, as hospitals overflowing with gunshot victims in Tehran and Shiraz, as the smell of tear gas that stayed in our hair.

Since then, the numbers drift around like ghosts. No one fully trusts them, but no one can ignore them. NGOs and foreign media talk about thousands of confirmed deaths, tens of thousands of arrests, hundreds of detention sites, some of them secret. Executions are said to have doubled in 2025 compared to 2024, as if the state were using the gallows as a way to govern through fear. When you read that from Paris or Zurich, it’s a statistic. For us, every number has a first name, a frozen Instagram account, an empty seat in class.

My brother, for his part, shows me on his laptop the figure everyone talks about: more than 80% of respondents, inside Iran and in the diaspora, reject the regime and say they prefer a democratic system. “You see,” he tells me, “we are not a small minority.” But when I look out of the window, the street is quiet. So I answer him: “If we are 80%, why am I afraid to speak on the bus?” and I play both sides of the conversation: “Because between a poll and the street, there are the prisons, the cameras, the gallows.”

In between, there is this machine of repression the reports describe in detail: live ammunition, internet shutdowns, summary courts, executions that have surged in recent years. The regime learned a lesson from 2022 and all the previous movements: hit fast, hit hard, cut information, and make it clear that no lasting organisation will be tolerated. Analysts talk of “fire under the ashes,” of a population that has moved from occasional protest to open rejection of the system, yet held back by the fear of an even higher human cost.

The diaspora often asks us: “But why don’t you all rise up at the same time?” I understand the question, especially when I see the crowds in front of embassies in Berlin or Toronto. Yes, we know Iranians abroad have resources, media, political access. Polls show they largely share our rejection of the regime and support sanctions, terrorist blacklisting for the Revolutionary Guards, more pressure on Tehran. But no demonstration in London protects a student arrested in Shiraz; no hashtag opens the door of a cell in Evin.

Since the American and Israeli strikes at the end of February, another layer of fear has been added. The bombings destroyed military sites, but also hit schools, hospitals, residential neighbourhoods; the Iranian Red Crescent and local media speak of hundreds of dead. In the queues outside pharmacies, I hear sentences I had never heard so clearly: “I hate this regime, but I don’t want my country to become another Iraq.” Experts call it a “rally round the flag” effect, that instinct to close ranks in the face of an external threat, even when you despise your leaders. I see it in my aunt’s eyes: she has not forgiven the blood spilled in January, but she refuses to see foreign missiles fall on Tehran.

In this confusion, the absence of a recognised figure is palpable. Polls on the opposition mention a dozen or two potential names, a “transition council” that many say they want, but no single face really stands out. People cite activists, former political prisoners, diaspora figures, but each one has enemies, accusations, quarrels. In my generation, we have no Massoud, no Mandela, no Vaclav Havel; we have Telegram channels and scattered influencers. Repression has been so systematic that any embryo of organisation is decapitated before it exists.

There is also geography, which strategists like to mention but which we live day to day. A mountainous country, several times the size of France, with minorities, remote regions, porous borders. Comparisons with Afghanistan come up often: difficult terrain, authoritarian central state, foreign interventions that make everything more complex. Those who dream of an armed uprising forget we have watched Syria, Iraq, Afghanistan; here, every family has a cousin or neighbour who has already been a soldier, a refugee, or both. The fear is not only of a regime; it is of collapse.

So why does “nothing happen” after the strikes? It is not nothing. Beneath the surface, there are families hiding the wounded, lawyers overwhelmed with cases, teachers who slip one sentence too many into a lesson, mosques where the imam, for the first time, dares to speak of “innocent blood”. There is also exhaustion, depression, the feeling of having been abandoned by a world that is moved for a few days and then moves on. When a foreign president talks about “freedom” while a missile falls on a girls’ school, the word loses some of its colour.

My father sometimes says: “If not now, when?” You write that if we don’t rise up now, we never will. Maybe. But the researchers who study our opinions say something else: that despite the fear, rejection of the regime remains massive and stable over time, that the desire for change does not vanish, it moves. It shifts from the street to the kitchen, from the kitchen to the living room, from the living room to whispered conversations in taxis. A revolution is not only a calendar; it is a long build‑up of things one can no longer forget.

What you may not see is that we are living through several emergencies at once: surviving repression, avoiding all‑out war, protecting our families, keeping a minimum of normality for our children. For you, watching images of Tehran is a political act; for us, buying bread is too, in a country where the economy is strangled, where inflation and unemployment feed anger as much as slogans do. We are being asked to be, all at once, brave, strategic, heroic and responsible parents. That is a lot for a generation that has known nothing but this regime.

One day, maybe, I will be in the street when everything tips. Or maybe it will happen differently, through a series of internal fractures, cracks in the security apparatus, compromises that no one dares to imagine now. Maybe there will finally be a face that unites more than it divides. In the meantime, tomorrow morning I will put my veil back on, not out of submission, but so I can go on watching, speaking in a low voice, passing on to my younger siblings what we saw in January and what we see today. From the outside, our silence looks like inaction. From the inside, it feels like held breath. And no one, neither you nor I, yet knows whether it is the breath of a resigned people or of a people gathering itself to jump.

Yours,
Nasrin

(fictional letter based on stories, transcripts and testimonies)

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Wealth

If,

and that is a very big “if” – Iran were to become a democracy, or even move clearly in that direction, the effect would be comparable to a second fall of the Berlin Wall. The economic and geopolitical map of the world would be redrawn: peace on both sides of the Strait of Hormuz and, perhaps, in the Red Sea would reshape oil and gas flows, secure shipping routes that are now under constant threat, and unlock enormous agricultural potential in a country that has water and fertile land but squanders them today for lack of investment and governance. The face of the Middle East would be transformed for generations.

But let us come back to the letter above.

Reading it, a scenario suggests itself – uncomfortable, but consistent with what we know of power balances, the terrain and historical precedent. It is far from the only possible one, but it is the one we currently see as most plausible for a long‑term investor.

First, we will have to accept that this will last longer than we think. Nothing in Iran’s security architecture points to a rapid collapse; everything points to a drawn‑out stalemate, with phases of relative calm and new spikes in tension.

Next, no one has either the interest or the political capital to send ground troops into Iran. The country is vast, mountainous, with a still‑coherent state and a vivid memory of occupations and neighbouring wars; the major powers have learned enough from Iraq and Afghanistan to keep their action to targeted strikes, cyber‑operations and economic pressure. That argues for a “contained” war in form, but one whose effects spread widely.

On energy, the pressure is real but not unlimited. The Strait of Hormuz carries roughly a fifth of global oil shipments; a prolonged closure would send prices soaring, but for now we are looking more at a risk premium, with Brent up several percent since the first strikes and shipping traffic down sharply as shipowners and insurers pull back. China, heavily dependent on Gulf flows, has every reason to lean on both sides to avoid a prolonged blockage that would endanger its own growth.

In such a scenario, oil and gas prices settle higher than they would have without the crisis, but without an uncontrolled spike as long as transit is not fully choked off. For central banks, that translates into slightly stickier inflation, data distorted by repeated energy supply shocks and, ultimately, rate cuts that are less generous than markets had hoped at the start of the year. Monetary easing remains possible, but the slope is flatter, more uneven, and every new flare‑up in the Gulf nudges the timetable back.

Air travel is on the front line. Airspace closures and detours around the Iran–Gulf zone lengthen routes between Europe and Asia, push up jet fuel consumption and raise operating costs. Analysts estimate that fuel accounts for 20–30% of an airline’s cost base, and the roughly 30% rise in crude since the start of the year is already squeezing margins. In the first days of the conflict, airline shares sold off under the combined impact of higher fuel, cancelled flights to the Middle East, and passengers’ reluctance to overfly the region.

On equity markets, this kind of backdrop favours segments that have already been in the spotlight for two years. Defence stocks, boosted by restocking in Europe and by multiple flashpoints (Ukraine, the Indo‑Pacific, the Middle East), could see a second year of strong demand and upward earnings revisions. Gold, already supported by geopolitical uncertainty and fears of incomplete disinflation, keeps its place as a store of value rather than turning into a purely speculative asset.

For investors, this scenario is neither apocalyptic nor reassuring. It describes a world in which geopolitical risk becomes a durable input into the price of energy and the cost of moving people and goods. Above all, it demands discipline: the ability to separate the noise of emotional market swings from the signal of a conflict that is settling in – without losing sight, somewhere at the edge of the horizon, of that rarer but transformative possibility of a Persian Berlin Wall.

B-R & H Finance

Founded in 2004, B-R & H Finance SA is a Swiss entity specialized in wealth management. We offer a full range of personalized and independent investment services and advisory solutions. Regulated by SO-Fit and authorized by FINMA, we are also members of the ASG (Swiss Association of Independent Asset Managers) and work with leading custodian banks.

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