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.
Alex Schober on “Thanks to Peronist governors, the Argentine government passed the 2019 budget in the lower house“
“FSG expects the 2019 budget to pass through the Argentina Senate. This will be a positive sign for financial markets, since signing this budget is a firm step toward achieving the IMF’s condition of a balanced primary budget next year. MNCs should expect more currency stability, and potentially the beginning of monetary easing at the very end of the year because of relative FX tranquility.“
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Mark McNamee on “Ukraine may get $8 bln after IMF program is unblocked“
“Very positive news comes to Ukraine after many delays and political concerns over receiving critical donor money. Assuming the government doesn’t try to raise spending in the 2019 budget against the IMF’s wishes - still a concern in the next two months - Ukraine is set for solid macroeconomic stability in 2019, allowing for a stable hryvnia and lower inflation than in 2018.“
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Athanasia Kokkinogeni on “Italian bond rally cools as Rome takes a defiant budget stance“
“FSG believes that the Italian government will respect the EU’s deficit rules in broad terms, but MNCs should keep an eye out for a downside in budget talks, weighing on 2019 growth. Italy’s ten-year bond yield climbed on the back of renewed concerns over a clash with the EU and after a Moody’s downgrade. Today, Di Maio reassured investors he doesn’t plan to ask for a looser EU deficit target.“
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Danyi Yang on “China’s New 34-Mile Bridge Links up to 70 Million People“
“As China’s most recent urbanization effort to build transportation infrastructure and integrate economies in city clusters, the Hong Kong–Zhuhai–Macau Bridge opened this Tuesday, marking the world’s longest sea bridge and merging 11 cities across China’s Pearl River Delta region. The new bridge is expected to reduce travel times and business costs, especially for MNCs manufacturing in Guangdong..“
Link to article | Read More of Danyi’s Commentary | Have a Question for Danyi?
William Attwell on “Naspers to Invest 314 Million in South African Tech Firms“
“The decision by Naspers (Africa’s largest company by market value) to invest heavily in its technology business and local start-ups is symptomatic of the increasingly fierce competition for market share in this critical market. Amid customer behavior changes and the growing need to optimize channel, firms are ratcheting up investment in their digital capabilities, including online retail.“
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Ramiro Sugranes on “Duque anticipates congressional backing in motion against Finance Minister Carrasquilla“
“The Colombian House of Representatives has called for a censure motion debate against the Finance Minister, Alberto Carrasquilla, who faces allegations of enriching himself from municipal bonds when he previously served in the same role. MNCs should track the outcome of the debate on October 24th, which could hold implications for the awaited tax reform’s progression and political stability.“