What Our Analysts Are Reading – 7/21/2017

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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.

Matthew KindingerMatthew Kindinger on “Deadly shooting erupts at military bases in Ivory Coast”

“Gunfire and small scale clashes occurred at two military bases over the weekend. The unrest was reportedly instigated by soldiers expressing frustration at the delay in bonus payments promised to them by the government following army mutinies earlier this year. This latest round of unrest is unlikely to directly impact MNCs, but it highlights the country’s fragile political and security climate.”

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Antonio MartinezAntonio Martinez on “‘Herculean’ U.S.-China Trade Deal Gets Less-Than-Heroic Reviews”

“An agreement signed between the Trump administration and China to improve market access for financial services and agroindustry US companies into China have shown limited success, a potential warning sign for US-China trade relations going forward.”

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Pratima SinghPratima Singh on “Pakistan court begins hearings to decide PM Nawaz Sharif’s future”

“Pakistan is facing significant risks going forward. In the worst case, the court will decide to disqualify the PM, sending the country into political chaos. In the best case, the judges will recommend that Sharif be tried on corruption charges. Either way, this is bad news for the economy. Executives should revise their targets for the country and be prepared to undertake contingency planning.”

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William Attwell on “Upbeat retail sales surprise market”

“New retail sales data (for May) indicate a 1.7% YOY increase, compared to 1.5% in April. The moderate increase belies the extent to which households remain under pressure, however, with many changing their purchasing behaviors accordingly – for example, by trading down or opting for stores’ own brand products.”

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JosefJosef Jelinek on “China Economic Expansion Exceeds Estimates on Factory Rebound”

“China is on track to meet its full-year growth target of ‘6.5% or above’, with 2Q GDP expanding 6.9% YoY, matching robust momentum in 1Q. The high growth rate highlights the resilience of China’s economy at a time when policy makers have been trying to curb excessive and speculative borrowing, leading to a slowdown in credit growth. An improved external sector helped to keep expansion on track.”

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Alec LeeAlec Lee on “Governo estuda usar apenas preço para decidir cortes no SUS, diz indústria”

“While the decision might generated savings in the short-term, it is very likely to elevated costs in the medium and long-term, especially considering the potential use of the judicial system to access medication in the public system for Brazilians that are denied a particular treatment. Nonetheless, the move signals the continue public budget constraints and search for savings in any format.”

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athanasia-kokkinogeniAthanasia Kokkinogeni on “Brexit Talks Round Two: What Are the Key Issues?”

“MNCs should continue to plan for Brexit creating contingency plans in a potential disruption scenario. The beginning of Brexit talks raises concerns about how prepared and qualified the UK government is to deliver Brexit within the decided timelines. A transitional deal is the most likely outcome going forward in negotiations, during which the UK will stay part of the EU single market.”

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