North Korea’s threat to launch intermediate range ballistic missiles towards Guam is credible, in our view. However, such actions would pose tremendous risks to the credibility of both Pyongyang’s and Washington’s defence systems, as well as their political resolve.
We expect overall local government bond (LGB) issuance to be softer in 2017 when compared with that in 2016, even as LGB bond issuance in H217 will be stronger than that in H117. Meanwhile, we believe that Beijing will remain committed to lowering market expectations of implicit government backing in the LGFV market, which will lead to higher LGFV yields and weigh on LGFV bond issuance.
The Middle East is moving quickly to embrace new, transformative digital technologies that will lead to economic diversification as well as enhance traditional economic pillars under threat from globalisation. However, the region is proving less adept at protecting and securing new digital platforms from an increasingly complex battery of threats. This is a major risk because, as we are keen to stress, anything that is connected can be hacked. And, as more devices and networks become interconnected, there is a growing need to close all vulnerabilities, no matter how minor, as a single incursion can have a widespread impact.
Iran's nuclear deal with the P5+1 powers appears most likely to hold - though risks of it unravelling are substantial. Should it collapse, then the impact on Iran's economy would be severe, as foreign investment would drop, causing economic growth to slow, and inflation and currency instability risks to spike. This, coupled with a rise in security threat levels, would in turn strengthen the standing of the hardline elite in Iran, at the expense of the pragmatist and reformist camps.
Asian E-commerce companies are set to face strong competition, with the entry of US e-commerce giant, Amazon, in Singapore. The region's e-commerce market is forecast to be worth USD62bn by 2020, with the highest e-commerce sales value coming from Indonesia, Malaysia and Singapore.
The luxury goods sector is poised for robust growth in Kenya, driven by the country’s rapidly expanding wealthy consumer base. Kenya is well-positioned to accommodate multinational conglomerates seeking to establish a footprint in the emerging sub-Saharan Africa (SSA) luxury market. We believe increased purchasing power, as incomes rise and the entrance of new luxury products and retailers will be the key to driving this growth in luxury demand.
The key regulatory trends outlined by BMI in September 2016 will continue to play through H217 and beyond. Mexico will continue to strengthen medical device regulation in order to reinforce its position in Latin America, expedite patient access to safe medical devices, and further develop the industry competitiveness by reducing bureaucracy, increasing transparency and providing extra revenue-earning opportunities. An improved regulatory environment will benefit multinational access to the medical device market, despite concerns over trade negotiations with the US.
Saudi Arabia's pharmaceutical and healthcare markets will continue to stimulate interest amongst generic and innovative drugmakers alike. Generic drug penetration will grow as local production increases and cost-containment remains high on the government agenda - outpacing growth in the patented drug market. Innovative medicines will maintain a leading share of the overall pharmaceutical market, however, due to the lack of generics awareness among consumers and an underlying preference for branded prescribing among physicians - although this will improve over the long term.
Ultra-deepwater deposits will drive upstream growth in Brazil over the next decade. Given large operators' heightened focus on offshore acreage, we expect ultra-deepwater crude will comprise the bulk of domestic output before 2019.
Debottlenecking LNG liquefaction terminals holds substantial potential to incrementally add new capacity at a low additional cost. Qatar and Australia hold more than 15mn tonnes of new capacity potential at existing facilities able to effectively benefit from upgrades and utilise their extensive gas resources.