Articles List

Articles List

Banking Sector: Regional Convergence, But GCC To Outperform

We hold a broadly positive outlook on banking sectors across the Middle East in H214 and beyond, and expect a slight convergence in growth rates due to base effects. The Gulf Cooperation Council will remain the outperformer across the Middle East and North Africa's banking sector over the coming years, although credit growth will continue to ease throughout the coming quarters. Outside of the Gulf, we forecast an uptick in asset growth in Egypt and Iran on the back of an improving economic outlook and low base effects.

Oil Heavyweights Counteract Problematic Supply Regions

Growing production in North America and Saudi Arabia will counteract the persistent supply issues in key producing regions. Combined with our more bearish oil consumption outlook for China for the year, the global oil market equilibrium shows a tentative surplus for 2014 onwards.

Islamic Banking: New Markets To Emerge

Islamic Finance is set for continued growth as several countries vie to become global centres, although expansion rates have peaked. At present, we expect Malaysia to remain the global leader in Islamic banking, although there will be concerted competition from Dubai. In addition, there is huge growth potential in India, Nigeria and Thailand.

Prescription Drug Expenditure Declines

Despite calls made by companies for the implementation of a system that adequately rewards innovation and supports investment in future medicines, we believe that Mariano Rajoy's centre-right administration is likely to remain committed to fiscal consolidation and will continue to target the healthcare sector and prescription drug expenditure in particular - a large recipient of government funds.

International Contractors Diversify The Competitive Landscape

BMI's Infrastructure Key Projects Database shows domestic firms hold the largest market share in Saudi Arabia's construction industry. Their market share however has reduced in recent years as more international players successfully enter the market.

Fiscal Deficit To Narrow In 2014 On Lower Public Investment Spending

We believe that slightly stronger growth and conservative spending plans for 2014 will see the Cuban government's fiscal deficit narrow this year, to 3.2% of GDP, compared to 3.4% in 2013. We forecast the deficit to tick up to around 4.0% of GDP over the coming years, slightly higher than years past, as policymakers make greater use of international capital markets.

Lead To Average USD2,300/tonne in 2015

BMI View: Lead prices will push higher over the coming months as consumption growth outstrips production growth, resulting in increasingly deep lead market deficits.

Global Cocoa Outlook: Côte d'Ivoire Focus 

Côte d'Ivoire will harvest a record cocoa crop of 1.54mn tonnes in 2013/14. However, the recovery in production will not last, and we see production decreasing in 2014/15. This will keep the global cocoa market in deficit, helping prices averaging higher in 2014 and 2015.

SOE Reform To Boost Sinopharm's Long-term Outlook

The 'mixed ownership' reform in Sinopharm will offer private investors more opportunities to capitalise on China's robust pharmaceutical market growth. Sinopharm's more modern, market-orientated ownership structure will attract more foreign investment and enhance its collaborations with multinationals. However, central government control and corruption associated with state-owned enterprises will hinder these entities to maximise their full commercial potential.

Healthcare Sector To Receive Oil Royalty Funds

Brazil's long-term commitment to healthcare will continue to provide significant revenue-generating opportunities for pharmaceutical companies, medical device companies and other healthcare service providers. The oil royalty funds will provide more financial backing for the sector's robust growth.

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