What Our Analysts Are Reading – 3/31/2017

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Each week Frontier Strategy Group’s global team shares their view on key media stories, and what the implications are for businesses that operate in emerging markets. For more information about how to contact our analysts, send us an email.

Joel Whitaker on “China’s Big Three Near Completion”

“Military facts on the ground in the South China Sea have changed decisively, with China now able to cover its claimed maritime territory with aircraft, radar, and missiles. As always, military capability will yield commercial influence.”

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Mark McNameeMark McNamee on “Beginning ‘Brexit’ and Bracing for Impact”

“MNCs should anticipate consistently declining economic sentiment and performance the rest of 2017 as the real impact of Brexit will now be felt. High business uncertainty will further dampen consumer and investor confidence, as inflation rises and erodes real wages from pound weakness. Firms should work closely with the UK government to help formulate the specific details of future trade deals.”

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Cheng Siew Chua on “BoI green-lights EV privileges”

“The Thai government is attempting to capitalize on its position as an automotive manufacturing hub in Southeast Asia by providing incentives for the production of electric vehicles. These incentives are timely and expected to bolster investment as subdued business sentiment, following the mourning period, begins to pick up in the second half of 2017.”

Link to article | Read More of Cheng Siew’s CommentaryHave a Question for Cheng Siew?

MarioMario Gutierrez on “More Argentines disapprove of Macri than approve for first time: poll”

“President Mauricio Macri has started to face popularity problems, as more Argentines disapprove his administration than approve for the first time since he took office in December 2015. Very inconvenient news taking into consideration that Congressional elections will take place in only six months from now.”

Link to article | Read More of Mario’s Commentary | Have a Question for Mario?

Zeynep Kosereisoglu on “Oil Producers Consider Output Cut Extension as Support Grows”

“As current level of production cuts by OPEC remains insufficient to drive oil prices to near US$60 per barrel, OPEC members will consider extending the deal to H2 2017. Although compliance to the deal will be questionable, not extending the deal and driving market sentiment and prices further downwards is a risk OPEC members are hoping to prevent.”

Link to article | Read More of Zeynep’s Commentary | Have a Question for Zeynep?

Natalia DuarteNatalia Duarte on “Venezuela announces a new exchange rate — but this one probably won’t help, either”

“Pres. Maduro announced a new model of the Dicom FX rate (aka Simadi), starting next week in an effort to stabilize the price of the bolivar. Two weekly auctions will be held and the system will receive contributions from public companies, but no details are known around pricing. Cash-strapped Venezuela, which has had exchange controls schemes since 2003, is unlikely to see any significant impact.”

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Antonio MartinezAntonio Martinez on “Trump Administration Signals It Would Seek Mostly Modest Changes to Nafta”

“The Trump administration is signaling a softer line to congress on NAFTA renegotiation, but multinationals should continue to build out contingency plans in case negotiations turn contentious over the next few years.”

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Alec LeeAlec Lee on “Government Announces Cut of R$42 Billion in Spending for 2017”

“While the cuts announced were larger than expected, up to R$ 9 billion of the cuts could be reversible should government revenues grow faster than expected throughout the year. Also, the cuts are being accompanied by tax hikes through the IOF (a tax on financial transactions) and the withdrawal of certain exemptions on the corporate payroll tax.”

Link to article |Read More of Alec’s Commentary | Have a Question for Alec?

Pratima SinghPratima Singh on “Amazon and Facebook Hit Unexpected Obstacle in India: China”

“U.S. tech firms are facing intense competition in India. Local tech startups, backed by increasing regional – both Chinese and Japanese – investment, are punching above their weight. Western multinationals will need to develop innovative strategies to access the large and extremely attractive Indian market more effectively.”

Link to article |Read More of Pratima’s Commentary | Have a Question for Pratima?

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