What Our Analysts Are Reading – 10/12/2018

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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.

Alejandro Valerio on “Peru opposition leader detained, cries ‘political persecution’

“The main leader of the Peruvian opposition, Keiko Fujimori, was arrested for allegedly accepting illegal funding from Odebrecht during her 2011 presidential campaign. FSG believes that this event raises the probability of approval of the political and judicial reforms on December 9 due to Peruvians’ rejection of corruption and the surging popularity of President Martín Vizcarra.

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Mark McNameeMark McNamee on “Ukraine’s intl reserves 3.5% down in Sept, lower than three-month barrier

“FSG still anticipates Ukraine to receive another tranche of IMF funding by the end of the year, helping to avoid a drastic fall in the hryvnia. Still, clearly some issues remain to be resolved – particularly regarding hiking gas prices – but the government will be forced by basic economic facts of its debt burden and forex reserves to ensure another tranche of funding.

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Ryan Connelly on “Oil Prices Fall on Expectations of Higher Inventories”

“Though unexpected supply outages and concerns over Iran have driven up oil prices across much of 2018, FSG has long expected oil markets to be in balance by year-end 2018, as supply growth has outstripped demand growth in 2018. This will continue in 2019. FSG expects Brent to average $77 across this quarter, as prices fade into year end.

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Matthew KindingerMatthew Kindinger on “Election observers broadly satisfied at start of voting – Mozambique Elections, AIM report

“Mozambique held local elections yesterday. These elections were the first that the opposition party (and former insurgent group) RENAMO have contested in 10 years. If RENAMO wins control of municipalities in the center of the country, prospects for a lasting peace settlement will improve. This will make it easier for MNCs to pursue opportunities beyond Maputo, which is the main center of demand.

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

Pratima SinghPratima Singh on “Demand Cooling in India Explains Why Central Bank Held Rates

“The RBI held interest rates steady at 6.5% because of fears that demand may be cooling. Unlike other central banks, the RBI has categorically stated that it will not intervene in markets to curb the fall in the rupee. MNCs should expect the currency to continue weakening as long as crude prices remain high. Executives should examine the impact of a weaker rupee on their local partners’ finances.

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