Articles List

Articles List

Investment Opportunities Boost FDI, But Structural Weaknesses To Persist

The Guatemalan economy will benefit from new opportunities in the power, logistics and autos sectors in the years ahead, bolstering foreign direct investment. However, limited fiscal revenue growth, weak human development and high narcotrafficking-related violence will act as continued challenges, tempering our enthusiasm for the Central American economy.

Piecemeal Reforms To Prolong Economic Malaise

The re-election of Brazilian President Dilma Rousseff on October 26 stymies Brazil's reform potential, and will result in only piecemeal economic and political reforms. As a result, economic activity will continue to stagnate in the coming years.

2015 Construction Outlook Driven By Delays

Delays with several ongoing public projects suggest that construction work on these projects could spill over to 2015, boosting construction and infrastructure growth rates. That said, we still do not believe that this boost will be sufficient to bring 2015 growth to levels seen between 2009 and 2013.

Remaining Bullish Despite Ford's Misfortune

BMI View: Ford Romania's decision to cut 20% of its workforce is not indicative of a bearish turn in Romanian passenger car production. We stress that passenger car production growth in the country will remain strong over our five year forecast period to 2018.

PBoC Easing Suggests Rising Concern Over Growth

The People's Bank of China eased monetary policy unexpectedly today, lowering its benchmark one-year lending rate by 40bps to 5.6% and the deposit rate by 25bps to 2.75%, effective November 22. At the same time, the PBoC loosened the deposit rate corridor, with banks now able to pay depositors 1.2 times the benchmark level, up from 1.1 times previously (effectively meaning the deposit rate ceiling remains 3.3% despite the 25bps cut). This was the first rate cut since July 2012, and comes amid an ongoing slowdown in the Chinese economy.

Laws Enacted By Decree Will Fail To Bolster Economy

The latest raft of policy changes enacted by decree by Venezuelan President Nicolás Maduro will do little to improve investor sentiment or economic output, both of which have sputtered over the past several months due to both internal dynamics and the falling price of oil. The policies will also fail to reverse the falling support for the ruling government, since the underlying reasons for discontent, including high inflation, a stagnant economy, and soaring crime, have not been effectively addressed.

Limited Opportunities For Netflix In Asia

BMI View: Netflix will launch in Australia and New Zealand in March 2015. As its service relies on high-speed internet connections, we believe it will target countries like Singapore, Japan, Hong Kong and South Korea for future expansion in Asia. However, Netflix's success in penetrating these markets will depend on its ability to provide relevant content at affordable prices.

Key Companies To Continue Leading Growth

The US will lead the developed world in growth over our 2018 forecast period. This will provide further top-down impetus to selected food and drink companies which are positioned strongly within their industry structures, particularly in sub-sectors such as craft beer, energy drinks, infant formula, fast-casual restaurants and coffee machines and capsules.

Clinical Trials To Decline

Developed state governments will need to develop policies to maintain their countries' long-term attractiveness as sites for clinical trials, especially as we expect cost of conducting clinical research to rise. The drivers of increased attractiveness of non-traditional locations for clinical studies include improving healthcare infrastructure, more and better trained medical professionals, and a growing requirement for local studies in the pharmaceutical approval process. We foresee a continuing shift in weighting towards emerging markets, especially for Phase III trials, while early-stage research is likely to remain in developed states.

Premiumisation sweetening India's chocolate industry

Strong opportunities will arise in the chocolate category in India over the next five years. Growth will be driven by premiumisation, as a result of large inequality in the country and a sharp division between rural and urban areas. Multinational food producers, already leading in the sector, will benefit from this trend.

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