Articles List

Articles List

May 2016 - Summer Of Risk

With global growth continuing to stutter amid unconvincing growth performances through the first four months of 2016, we envisage some key downside risks becoming increasingly prevalent in the months ahead.

Sugar Tax Unlikely Over Five-Year Forecast

The FDA's decision to redesign Nutritional Facts labels to more clearly show information on calories and sugar is the type of 'light touch' regulation that will successfully lead to a decrease in sugar intake in the US. There will not be a national sugar tax approved over our forecast period to 2020, as there would be staunch opposition from powerful lobbies and consumers themselves.

Global Pharmaceutical R&D Spending Growth To Slow

The sustained reinvestment of revenues into R&D activities is the key to future success for a pharmaceutical company. Investigating new drugs and medical interventions is a high risk enterprise, and most candidates will fail to reach commercialisation. A differentiated pharmaceutical that addresses an unmet medical need can generate extremely significant sales over its period of exclusivity, or until an improved competitor reaches the market. However, it is vital to remember that increased R&D spending by a company does not always correspond into higher revenue and improved shareholder value.

Vox Grows Enterprise Portfolio With Cloud Services Launch

Vox Telecom has launched its private cloud service in a move to grow its enterprise portfolio and compete effectively against other operators such as Vodacom and MTN. The burgeoning South African cloud computing market will provide the foundations for growth in cloud services adoption over the medium-to-long term.

Price Hikes Will Not Impact Robust Consumption

The petrol price hike will have no material effect on fuels consumption in Nigeria, which we expect to grow fervently throughout our forecast period as consumers are already willing to pay above mandated prices demonstrating the unmet demand.

YUM! Struggles In Low-Spending Environment

Consumer spending has remained constrained even as the rest of the economy posts strong headline growth rates. This is weighing on quick serve restaurants, with the immediate outlook for YUM! Brands remaining unattractive. While Jubilant FoodWorks has outperformed and gained market share, we believe increased competition will become a concern for the company over the coming quarters.

Oil & Gas Disruptors: EOR And Digital Tech

A number of existing and emerging technologies have the potential to reduce costs and increase recovery rates in the oil and gas sector. EOR and the integration of digital technology will make the biggest impact over our 10-year forecast period.

Despite Unity Government, Political Risks Will Remain High

The formation of a new unity government between President Salva Kiir and Vice-President Riek Machar is a tentative positive step for South Sudan. However, the political scene will remain highly unstable, owing to disagreements over the formation of new states, skyrocketing inflation, and Machar's continued presidential ambitions.

Brexit Scenarios: Power And Renewables

Ahead of the referendum on the UK's membership of the European Union (EU) on June 23, our core scenario is that the UK will vote to remain in the EU - and we assign a 65% probability to this outcome.