What Our Analysts Are Reading – 11/30/2018

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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.

Ramiro Sugranes on “The current financing law proposal in Colombia would only shore up COP 7 trillion

“Political backlash has forced the government to water-down its proposed tax reform. Measures aiming to increase the tax burden for individuals, including the highly controversial VAT expansion, have either been scratched or modified. If the government fails to push measures to fill its fiscal gap of COP 14 trillion, budget cuts will have to be made and fiscal sustainability risks will heighten.

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Josef Jelinek on “Drugmakers Gain More Access to China, but at a Price”

“China has long been known for its slow drug-approvals process, whereby MNCs were required to conduct separate tests on Chinese patients before drugs could be approved. Last year, China began accepting global clinical trial data, saving MNCs time and money. However, many MNCs have had to slash prices so that China’s government insurance will cover the costs of some of the newly approved treatments.

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athanasia-kokkinogeniAthanasia Kokkinogeni on “‘Real economy’ companies not prepared for a no deal Brexit, warns Bank of England”

“Despite our confidence in a transitional deal, the impact and the likelihood of a Hard Brexit is significant enough that we recommend companies to activate or, at minimum, build their scenarios for a hard Brexit to ensure they are prepared to respond should the situation deteriorate. MNCs should closely monitor the signposts to inform their Brexit contingency plans.

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Alex Schober on “Copper Declines on Tariff Worries

“Despite the fact that the spot price of copper has fallen by 18% since a peak in June, FSG continues to maintain that copper prices will stay more or less at the 2018 average in 2019. This means that export revenues in copper producing countries such as Peru and Chile will be slightly below the high levels witnessed in 2017 and early 2018.

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

Ryan Connelly on “GM Closings a Fresh Sign of Worry for Economy

“New passenger vehicles sales are flat YOY – while sedan sales are down 13%, but light trucks are up 8.3%. GM is shutting down unpopular sedan platforms as part of an overall operational shift that will produce different cars, in more automated facilities. It is true that firms should expect US growth to slow in 2019 and beyond, but the GM plant closures have no insight about the current US economy.

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

William Attwell on “How to Stop a South African Land Grab

“While significant progress on the legal process to amend South Africa’s constitution is unlikely ahead of the country’s election expected in the mid-2019, MNCs should not expect concerns about its impact on the economy to dim political appetite to push it through. Survey evidence indicate a large majority of ruling party supporters support the move.

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

Mark McNameeMark McNamee on “Russia raises 1 bln euros at 3 pct yield in Eurobond sale

“The eurobond further indicates the undervalued nature of the ruble, which has been weak given the dampened sentiment related to anticipated sanctions. The ruble will remain undervalued into 2019, just as it was overvalued for more than a year in 2017 and early 2018. Meanwhile, the bond further reinforces the general positive fundamentals behind Russia’s economy and expected growth going forward.

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

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