Finland election likely to see centre-left government

2015 ◽  
Keyword(s):  
Euro Area ◽  
Medium Term ◽  
Short Term ◽  
Content Type ◽  
Party Government ◽  
Euro Area Country ◽  
National Coalition

Significance Finland looks set to be the next euro-area country to see the ousting of a government made unpopular by austerity and low growth, in favour of an opposition force. However, the Finns Party -- the populist Euro-sceptic opposition -- have lost support in recent years, and may enter government only as a third partner. Impacts In the medium term, euro-area recovery could revive Finnish exports and growth. In the short term, more unpopular austerity measures are in prospect, potentially complicating the new government's life from early on. A government including the Finns Party is likely to take a hard line against further euro-area support for the bloc's troubled economies. Without the National Coalition Party, government enthusiasm for NATO membership is likely to fall. The new government is likely to tone down its predecessor's tough language against Russia.

Africa's 'oil price winners' face mixed prospects

2015 ◽  
Keyword(s):  
Southern Africa ◽  
Oil Prices ◽  
Oil Price ◽  
Political Space ◽  
Medium Term ◽  
Short Term ◽  
Economic Diversification ◽  
Content Type ◽  
Civil Unrest ◽  
Sub Saharan

Subject Africa's oil price winners. Significance Despite traditionally being winners during periods of oil price decline, the medium-term outlook is mixed for sub-Saharan Africa's (SSA) oil importing countries -- reflected in the IMF's recent downgrade of its SSA outlook from 5.75% to 4.9%. Short-term gains reduce the fuel import bill, but uncertainty looms over energy investments in eastern African, while idiosyncratic risks cloud the outlook for southern Africa. While oil exporters may also reap some benefits, much will depend on the degree of oil dependency, political space to make the necessary policy retrenchments, and the extent of government financial buffers. Impacts If sustained, low oil prices could provoke civil unrest, rather than reforms, in oil exporting countries. Most oil exporters will struggle to maintain macroeconomic stability if oil remains low for more than a year. However, economic diversification to some degree helps to shield the region from sharp global slowdowns.

ECB sovereign QE could support inflation trends

2015 ◽  
Keyword(s):  
Euro Area ◽  
Risk Sharing ◽  
Large Scale ◽  
The United States ◽  
Wealth Effects ◽  
Medium Term ◽  
Content Type ◽  
European Institutions ◽  
The Us ◽  
Asset Backed Securities

Significance The programme expands existing purchases of asset-backed securities and covered bonds with large-scale buying of bonds issued by euro-area governments, agencies and European institutions. Purchases will amount to a combined total of 60 billion euros (69 billion dollars) per month, starting in March. They will continue until at least September 2016 -- or until there is progress towards the central bank's medium-term inflation goal. Impacts The larger than expected size of the programme will be achievable thanks to partial risk sharing among national central banks. Wealth effects will be smaller than in the United States and United Kingdom, as euro-area capital markets are less deep. The QE programme will amount to 12% of euro-area GDP, while the US programme was larger, at 25% of GDP.

Argentine economic shifts will not bring rapid relief

2016 ◽  
Keyword(s):  
Foreign Exchange Market ◽  
Exchange Market ◽  
Policy Changes ◽  
Medium Term ◽  
Short Term ◽  
Rapid Improvement ◽  
Content Type ◽  
Export Taxes ◽  
Substantial Progress ◽  
Rapid Relief

Significance In his first month in office, President Mauricio Macri made substantial progress in removing controls implemented by the former administration. The new government liberalised the foreign exchange market, increasingly constrained over the last four years, and international trade, with the lifting of most export taxes and the removal of controversial non-automatic import licences. Impacts Policy changes will not bring rapid improvement, with little recovery this year or next. This will raise social conflict in the short term, putting governability at risk. Medium-term price stabilisation, in the framework of a managed float and an inflation target regime, may drive a rebound.

Ties with Hamas could help Egypt in Sinai

2017 ◽  
Keyword(s):  
Border Crossing ◽  
Medium Term ◽  
Short Term ◽  
Humanitarian Crisis ◽  
Content Type ◽  
Tourism Sector

Significance The fact that the meeting was held in Egypt, rather than the usual meeting place of Qatar, signals a shift in Hamas-Cairo relations. Impacts In the short term, any expanded cooperation could see a conflagration in the Sinai as insurgents fear encirclement. In the medium term, genuine Egyptian-Hamas rapprochement should go some way towards containing the insurgency. A stable Sinai could help Egypt’s foundering tourism sector. An open Rafah border crossing could see reconstruction start in earnest in Gaza and head off a looming humanitarian crisis.

Angolan oil sector reform will require innovation

2018 ◽  
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Oil Price ◽  
Structural Reforms ◽  
Medium Term ◽  
Short Term ◽  
Sector Reform ◽  
Content Type ◽  
Oil Sector ◽  
Oil Company

Subject Sonangol priorities. Significance Early structural reforms by new President Joao Lourenco and more positive economic projections for 2018 suggest a potential uptick in Angola’s fiscal fortunes. Since assuming power in September, Lourenco has overhauled the leadership of state-owned oil company Sonangol and dismissed several prominent officials associated with his predecessor Jose Eduardo dos Santos. Separately, Lourenco has moved to tackle the overvalued kwanza. While this will raise debt-servicing costs, this will be partly ameliorated by the recent oil price of over 60 dollars per barrel. Impacts Scrapping the dollar currency peg will help ease the foreign exchange crisis and end payment constraints in the aviation and oil sectors. A more realistic exchange rate will fuel inflation in the short term but will likely improve medium-term economic prospects. Urban support for the People's Movement for the Liberation of Angola (MPLA) could decline further if reforms remain elite-focused.

Czech vote may raise chances of new ANO-led government

2018 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Household Consumption ◽  
Capacity Constraints ◽  
Consumer Confidence ◽  
Structural Reforms ◽  
Medium Term ◽  
Short Term ◽  
Public And Private ◽  
Content Type

Significance Now that Zeman has successfully retaken the presidency with 152,000 more votes than his pro-Western rival Jiri Drahos after a campaign that was dominated by domestic issues, attention will focus once again on forming a majority government after the largest parliamentary party, ANO 2011, lost a vote of confidence on January 16. Impacts Consumer confidence may strengthen in the short term as the old ANO-CSSD government’s policies take effect, providing an economic boost. Robust household consumption and public- and private-backed investment may also contribute to stronger GDP this year. Although monetary policy is set to tighten, in response to signs of overheating, interest rates will remain at historic lows. The outlook for the economy in the short term is upbeat, with a strong outturn expected for the fourth quarter of 2017. Structural reforms will be required over the medium term to reduce the risk of capacity constraints, especially in industry.

Overreaction effect: evidence from an emerging market (Shanghai stock market)

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Krishna Reddy ◽  
Muhammad Ali Jibran Qamar ◽  
Nawazish Mirza ◽  
Fangwei Shi
Keyword(s):  
Regression Analysis ◽  
Stock Market ◽  
Investment Strategy ◽  
Individual Investors ◽  
Medium Term ◽  
Short Term ◽  
Content Type ◽  
Reversal Effect ◽  
Additional Support ◽  
Term Analysis

PurposeThe purpose of the study is to examine overreaction effect in the Chinese stock market after the global financial crisis (GFC) of 2007 for all the stocks listed in Shanghai Stock Exchange (SSE) Composite 50 index.Design/methodology/approachTo capture overreaction effect in the stock listed at SSE 50 Index, a time series analysis of average cumulative abnormal return within a unified framework is applied for the period of January 2009 to December 2015. From these loser and winner portfolios, contrarian strategy is applied to build arbitrage portfolio, which is the difference of mean reversions between loser and winner portfolios. The portfolio construction is based on a 12-month formation period and 6-month testing period for intermediate-term analysis and. for short-term analysis, 6 month formation and 3 month testing periods. The authors also applied regression analysis to test a return reversal effect for the sampled period.FindingsResults show that contrarian strategy yields positive excess returns for the arbitrage portfolio for most of the testing periods. The intermediate baseline case shows the arbitrage portfolio producing an average excess return of 14.1%, while even the short-term one produces 4%, which is statistically significant at the 5% level. The study finds asymmetrical overreactions in the SSE especially for loser portfolios. The biggest winner and loser portfolios follow the mean reversal effect. Moreover, before-after test for the biggest winner and loser portfolios shows that the losers recovered and beat the market immediately.Practical implicationsThe study could benefit government, policy makers and regulators by studying how presence of more individual investors than institutional investors of China stock market leads to more irrational decisions giving rise to volatility. The regulators could build favourable policies for institutional investors to give them incentive to invest more than individual investors through which market volatility could be controlled.Originality/valueThis research contributes to market behaviour research, showing how working under hypotheses of overreaction; gains can be made with contrarian investment strategy through arbitrage portfolios. The authors provide specific additional support for the short and medium-term overreaction in the SSE for the period 2009–2015 using regression analysis.Contribution to ImpactThis research contributes to market behaviour research, showing how working under hypotheses of overreaction; gains can be made with contrarian investment strategy through arbitrage portfolios. We provide specific additional support for the short and medium-term overreaction in the SSE for the period 2009–2015 using regression analysis.

New measures will provide temporary relief for Greece

2021 ◽  
Keyword(s):  
Public Debt ◽  
Labour Force ◽  
Structural Reforms ◽  
Medium Term ◽  
Short Term ◽  
Content Type ◽  
Temporary Relief ◽  
Growth Prospects ◽  
Better Than ◽  
Public Opposition

Significance The new forecast is based on strong results in the second quarter, better-than-expected tourism revenues over the summer months and the approval of the Greek Recovery and Resilience Plan by the European Commission in July. Mitsotakis also announced several new measures, including tax cuts to stimulate spending. Impacts High unemployment (14.2% of the labour force) and structural labour market weaknesses will constrain growth. Structural reforms lost momentum during the pandemic, dampening medium-term economic growth prospects. Public opposition to vaccination might necessitate new movement restrictions by year-end, inhibiting growth. Availability of a EUR30bn liquidity buffer will support sovereign ratings and investor interest in the short term. Short- and medium-term public debt refinancing risks remain low as 75% of debt stock is held by the official sector.

Mozambique's FRELIMO faces military intervention push

2021 ◽  
Keyword(s):  
Strategic Alliances ◽  
Oil And Gas ◽  
Military Intervention ◽  
Liquefied Natural Gas ◽  
Medium Term ◽  
Short Term ◽  
Humanitarian Crisis ◽  
Political Issue ◽  
Content Type ◽  
Succession Process

Significance Oil and gas major Total has suspended work on its nearby liquefied natural gas (LNG) site, while a humanitarian crisis has worsened. Pressure for an external military intervention has increased dramatically, notably from the Southern African Development Community (SADC), but Mozambique’s ruling FRELIMO remains reluctant. Impacts A delay to planned LNG projects, coupled with ongoing insecurity, mean economic growth will remain subdued through the medium term. Delays to FRELIMO’s succession process to replace President Filipe Nyusi will become an increasingly explosive political issue. An outside military intervention would force FRELIMO to re-align its regional and international strategic alliances in the short term.

Election exacerbates Costa Rica infrastructure issues

2017 ◽  
Keyword(s):  
Infrastructure Investment ◽  
Foreseeable Future ◽  
San Jose ◽  
Medium Term ◽  
Short Term ◽  
Content Type ◽  
Rural Infrastructure ◽  
Road Congestion ◽  
Multiple Challenges ◽  
Short Term Investment

Subject Infrastructure spending. Significance Increased infrastructure investment under President Luis Guillermo Solis has helped drive economic activity upwards slightly over the last year. However, with elections set for 2018, multiple challenges persist, delaying attempts to address long-standing deficiencies and leaving the fate of many projects in the hands of the next administration. Impacts Much of short-term investment will be in improving rural infrastructure. Alleviating road congestion in San Jose will be a key medium-term priority, whoever is elected president next year. Despite government efforts, inefficiency will hamper infrastructure investment for the foreseeable future.

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