Articles List

Poor Economic Outlook To Worsen Political Risk Profile

The poor outlook on the Azerbaijani economy in light of declining oil and gas production will increase pressure on President Ilham Aliyev to push through structural reforms. However, his economic diversification plan unlikely to be fruitful over the coming years, worsening Azerbaijan's political risk profile.

AmorePacific Turns To US And Europe

South Korean cosmetics brands are seeking to diversify their operations as demand from the Chinese consumer declines amid political tensions between the two countries. AmorePacific has accelerated expansion plans into the US and Europe, with each region offering high spending personal care markets that continue to grow, and consumer bases that are receptive to new cosmetics products and will likely embrace the K-beauty trend.

Hydropower Sector To Drive Robust Market Growth

The completion of numerous small- and large-scale hydropower projects will be the dominant driver of strong capacity growth in Peru's power market over the next decade. Delays in project implementation remains the most relevant risk in the market, particularly for larger hydropower plants.

Monetary Policy: Why We Are Sticking To Our Guns

Our view that monetary policy will be static through 2017-2018 is coming under increasing pressure as inflation flirts with the top end of the Bank of England's tolerance range. We previously warned that our view would be tested in this manner and, despite the hawkish posturing of the MPC, we are sticking to our current assessment.

Cautious RBA To Keep Policy Steady Until Late-2018

The decision by the RBA to keep its benchmark policy rate steady at 1.50% and also maintain its neutral stance at its October 3 monetary policy meeting was in line with our expectations, and we forecast the central bank to keep its policy unchanged until late-2018. The central bank will continue to seek to strike a balance between ensuring financial stability while also stoking inflationary pressures in the country.

Respiratory Disorders To Continue On An Upward Trajectory

Cameroon contends with a variety of infectious diseases, yet the gradually evolving epidemiological profile will provide greater revenue earning opportunities for pharmaceutical companies producing chronic disease treatments. However, we do not expect any significant investment from multinational drugmakers over the near-to-medium-term, with underlying weaknesses in the pharmaceutical sector weighing on patented drugmaker's potential. Indeed, generic products will maintain a dominant share of the market in both value and volume terms.

Arrears, Bank Recapitalisation Will Add To Debt

Higher earnings from oil exports and tax collection will gradually narrow Tehran's budget balance over the coming years. Public debt will nevertheless continue to see sharp growth, as the government - in addition to covering its budget shortfalls - needs to clear accumulated arrears and inject capital into the local banking system.

Catalan Independence Unlikely Despite Referendum Violence

Early results from the Catalan independence referendum suggest an overwhelming 'Yes' victory, although turnout is likely to have been low. While the Catalan government is likely to issue a declaration of independence within 48 hours, this will be symbolic and Madrid will reject it. Eventually, discussion will be held between Madrid and Catalonia, with greater autonomy being granted rather than independence. However, given the violence associated with the vote, support for independence is likely to grow and tensions between Madrid and the Catalan region will remain elevated for the foreseeable future.

Capex Rise Targets Impending Deficit

Middle Eastern capex is set for another consecutive year of growth, rising 1.6% y-o-y in 2018. Spending will be largely directed upstream, as NOCs position themselves to meet a large deficit forming in the global oil market post-2019.

NAFTA Update: Deadlock To Result In Few Treaty Changes

An abbreviated timetable, slow progress, and entrenched negotiation positions on key issues such as dispute resolution mechanisms make it increasingly likely that the North American Free Trade Agreement renegotiation process will result in little more than a middle-of-the-road agreement by the end of 2017 or early 2018. While there is the looming threat of the US unilaterally withdrawing from the agreement, we believe that political, economic, and legal constraints will prec lude this.

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