What Our Analysts Are Reading – 2/9/2018

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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.


“In line with FSG assumption, Chancellor Angela Merkel and Martin Schulz’s Socialists agreed to renew the grand coalition. This confirms the strong economic momentum in Germany and in the eurozone for MNCs. The Socialist party first needs to vote on the final deal the coming days for the new government to form by Easter.”

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

JosefJosef Jelinek on “China’s private funds face employee exodus, business scramble as rules bite”

The new Financial Stability and Development Committee (FSDC), soon to be headed by Liu He, Xi Jinping’s trusted adviser, has taken the lead on finalizing the new WMP regulations. At his recent speech at Davos, Liu said that “authorities will strive to bring the country’s overall leverage ‘under effective control’ within three years.” The FSDC is set to play a key role in achieving this objective.”

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

Ryan Connelly on “The Era of Easy Money Is Ending, and the World Is Bracing for Shocks”

“The Great Recession has ended, and with it, a decade of unconventional monetary policy. This is the first year since 2014 that new issuance of sovereign debt exceeds central bank purchases – so more supply needs to be absorbed by private markets. At the same time, expectations of higher inflation and faster rate hikes puts pressure on bonds. Interest rates will be volatile but biased upwards.”

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

Zeynep Kosereisoglu on “Netherlands withdraws ambassador from Turkey”

“Executives should monitor the risk of worsening relations between Turkey and EU countries. If political tensions begin to affect economic relations, the impact on the Turkish economy and MNCs’ operations will be severe. Although this risk has a low likelihood, MNCs will benefit from determining their exposure to a disruptive event where EU puts varying types of economic sanctions on Turkey.”

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

Martin Belchev on “Romania’s Govt. adopts emergency ordinance to correct fiscal measures’ effects”

“The emergency ordinance seeks to address the fall of net wages for mid-to-high skilled employees, resulting from the social contribution transfer. This will cause more confusion and problems, as the government will pay part of the contributions for these employees, resulting in additional spending and accusations of discrimination by firms, who raised wages to account for the fiscal changes.”

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

Alex Schober on “Chile’s IMACEC (economic activity index) expanded 2.6% in December and finished 2017 with growth of only 1.6%”

“Chile’s economic activity index (IMACEC) surpassed expectations by expanding 2.6% in December. Despite low yearly growth in 2017, economic activity was on a clear upward trend towards the end of the year. FSG expects copper export revenue, consumer spending, and a recovery in gross domestic investment to push growth in 2018. Our current forecast is 2.7%, with an upward bias.”

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

William Attwell on “End game looms for South Africa’s Zuma”

“New ruling party head Cyril Ramaphosa will likely announce the timing of President Zuma’s removal from office in the next few days. It follows 24 hours of intense intra-party talks, resulting in the opening of parliament being postponed. Expect the rand to strengthen sharply following Zuma’s removal.”

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

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