Citigroup has selected the Israeli market as a relative outperformer among the regional markets in Central-Eastern Europe, Middle East and Africa. "Israel's unchallenging earnings yield ratio is a key argument for that market being a relative outperformer in the current environment," said Citigroup in its CEEMEA regional report. "Israel stands out as attractive in terms of earnings yield ratio trends. Here, inflation is practically nonexistent; interest rates are very low, and valuations have not stretched enough to negate the benefits of this low- interest-rate environment. We are overweight on Israeli equities." The report also cited Russia as a "relative outperformer," and noted that South African equities looked particularly expensive relative to debt, while earnings-yield ratios had also deteriorated in Hungary, Poland and the Czech Republic. "Monetary conditions are tightening in CEEMEA" said Citigroup. "This is due to both higher US bond yields, which have pushed up the cost of external borrowing, and domestic rates, which in most CEEMEA markets have been rising."