Articles List

Articles List

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.

Municipal Election Victory To Facilitate Policy Reform

A landslide victory for the governing Georgian Dream (GD) coalition in Georgia's second-round municipal elections will allow for much smoother implementation of government policy across the country, which will accelerate the pace of crucial political and economic reforms required to further integration with the EU. The run-offs were held where candidates for mayor or the position of gamgebeli (head of provincial municipality) had not received a 50%+1 vote share in the first round of elections held on June 15. We believe that given all 12 city mayoralties (including the capital Tbilisi) and the 13 gamgebelis are now held by the GD coalition, the central government will find it easier to implement reforms countrywide.

AbbVie Acquires Shire

The acquisition of Shire will offer AbbVie greater strategic and financial flexibility to enhance its business development objectives and improve shareholder returns. With a lower tax rate and an expanded product portfolio, AbbVie is set to become more competitive among the major multinational pharmaceutical companies.

Tight Gas To Displace Shale

Aramco's strategic shift away from shale gas and towards tight gas will offer a more economically viable route to unconventional resource development. However, given various technological and financial barriers to production, we see offshore and associated gas continue to dominate output growth across our 10-year forecast period.

Bank Bailout Reports Highlight Systemic Problems

The Angolan government's reported move to guarantee billions of dollars' worth of bad loans held by distressed Portuguese bank Banco Espirito Santo Angola (BESA) has sent jitters through the financial sector. While a full blown banking crisis is unlikely, the bank's problems highlight systemic weaknesses in governance - one of a number of issues holding back progress within the sector.

Little Short-Term Impact From New Sanctions

The new sanctions introduced by the US on Russia will have no significant impact on ongoing oil and gas operations. However, the growing divide between Russia and the US and EU, will push the country further east, increasing its dependency on China for finance and technology.

Abbott Reaffirms Commitment To Emerging Markets

Abbott Laboratories is a leading exponent of making fixed capital investments in high growth markets such as China. This provides a hedge against currency fluctuations. It demonstrates commitment to the country, which helps from a regulatory standpoint. It also reduces shipping and freight costs.

Ground Offensive Not Resulting In Lasting Resolution

The Israeli ground offensive in the Gaza Strip will last less than a month. A ceasefire will not result in a lasting solution to the conflict, and Hamas will remain in control of the Strip. The offensive could lead to radicalisation in Gaza, while the heavy death toll of Palestinian civilians will increase Israel's isolation on the international stage.

Lack Of Reform Means Bigger Role For ECB

Growing opposition to austerity will undermine eurozone fiscal reform momentum over the coming years, particularly in peripheral economies with riskier debt loads. While an ECB pledge to 'do whatever it takes' to save the eurozone has lowered borrowing costs and improved debt sustainability, this same pledge is likely to undermine governments' appetite for reform. Sluggish progress tackling debt loads will make the eurozone increasingly reliant on ECB monetary expansion, which itself will be insufficient to prevent the region entering a 'Japan-style' period of low growth over the next decade.

Mining Reforms To Aid Exploration Drive

Recent changes to Mongolia's Minerals Law will encourage more mining exploration in the resource-rich country. Despite disruption to the underground development of the Oyu Tolgoi mine, our core view remains that the project will eventually be pushed through over 2014-2015.

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