Articles List

Turbulent Geopolitical Landscape To Impede 'One Belt One Road'

China's 'One Belt One Road' vision of a Trans-Eurasian transport corridor will face multiple obstacles, as most of its land routes pass through countries that are already politically unstable or are at risk of considerable upheaval over the coming decades. The initiative will thus prompt China to play a greater role in shaping Eurasia’s security relationships as well as trade.

Global Trade: What Could Go Right?

Rising fears about the demise of the global trade regime are well justified, with a rise of populism in developed states spurring increasingly nationalist policymaking and potentially exacerbating a structural slowdown in world exports. However, there are several reasons why the outlook is not quite as negative as it appears. While a rise in protectionism is a clear downside risk to global trade, we likewise see reasons to be optimistic beyond the immediate future. These include the following five:

First LNG Imports To Start In 2017

The Philippines will start importing LNG for the first time in 2017. LNG will help to offset the rapid output declines at the Malampaya field, amid limited exploration opportunities in the South China Sea and government-led efforts to boost gas-fired electricity generation.

Weak Divestment Receipts Pose Risks To Fiscal Consolidation

We believe that India will likely fail to reach its targeted revenues from divestments in FY2017/18 (April - March), which poses downside risks to our forecast for the fiscal deficit as a share of GDP to narrow to 3.3% in FY2017/18, from 3.7% in FY2016/17. Opposition from powerful trade unions, together with local elections being held in states where many of the PSUs planned for sale are located, will hinder the divestment process and reduce the amount of proceeds collected.

Growth Pick-Up Is Unsustainable

The Hong Kong economy ended on a strong note in Q416, with real GDP expanding by 3.1% y-o-y (versus 2.0% y-o-y in Q316), bringing full-year 2016 growth to 1.9%. We maintain our 2017 real GDP growth forecast of 1.7% as this pick-up is unsustainable as the external environment remains uncertain while domestic demand faces downside risks from an expensive housing market. The impact from the one-off measures announced during the FY2017/18 budget are unlikely to have a significant impact on growth.

Americas Autos Production: Mexico Chasing US With Better Rewards Prospects

As the first and sixth highest ranking countries globally, the US and Mexico top the regional rankings for the Americas in terms of BMI's new Autos Production Risk/Reward Index. Globally, the America's region ranks, third below Asia and Europe, held back by high risks and slow production recovery in Latin America, mainly in the Mercosur region. As a global underperformer, Venezuela is also dragging on the region's score with risks and rewards in the country all hitting critically low levels.

Refined Fuels Demand Has Little Room To Run

Refined fuels consumption will moderate in 2017 as consumer behaviour adjusts to an uptick in prices. Increased fuel efficiency and modest economic gains will cap upside momentum into 2018.

China Trade: Net Steel Exports To Find Floor In 2018

Chinese net steel exports will continue on the declining track in the coming months on the back of strong domestic demand for the metal as the government intensifies fiscal support to the infrastructure and construction industries in 2017. In 2018, net steel exports will find a floor, or even start to increase, as domestic demand will wane with the cooling of fiscal support while production will remain steady.

Construction Outlook Upbeat, But Headwinds Persist

Kenya's construction market will record significant expansion over our 10-year forecast period between 2017 and 2026 as investment flows into improving the country's logistics profile and into commercial developments to support the growing business and retail activity in Nairobi. Significant support for the sector will stem from the Kenyan budget, backed by foreign investment into the country's infrastructure development plans.

Acino Acquisition Will Be A Fresh Start For Litha

Endo International's divestment of Litha Healthcare highlights that Endo was not able to increase its presence in emerging markets in comparison to its blossoming US Generics segment. The new relationship between Litha an Acino will be a fresh start for both. Historically, Acino has had little presence outside of Europe, but has long stated that entering certain emerging markets is a strategic aim. Litha, representing a well-established presence in South Africa, a well-established African pharmaceutical market, will provide Acino with a key component to its expansionist outlook.




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