Americas: Venezuelan opposition to take to the streets
Sectors: all
Key Risks: civil unrest; political instability

In Venezuela, the MUD opposition coalition called on Venezuelans to take to the streets across the country on 12 October to demand that electoral authorities speed-up the recall referendum process against President Nicolas Maduro. The second phase of the process has been scheduled for 26-28 October. Electoral authorities have stated that, should controversial requirements be met, the recall vote could not happen in 2016, enabling Maduro to avoid calling new elections should he lose the vote. His vice-president would replace him until the end of the term in 2019. Tensions are expected to continue to increase and the risk of violent clashes between rival activists, and between the latter and the security forces, will remain high. All planned rallies should be avoided.
Asia-Pacific: IMF warns of risk of financial crisis
Sectors: all
Key Risks: financial crisis, slow growth, corporate defaults

The IMF warned that China could be heading for a financial crisis, due to high levels of financial and corporate debt. Deputy Director of IMF’s Asia-Pacific department, Markus Rodlauer, said levels of debt in the Chinese economy were on an ‘unsustainable path’, warning of ‘serious repercussions’ for the global economy if the situation was not addressed. The interventionist approach of the Chinese government could prevent a serious crisis from manifesting, and the government has the fiscal resources to mitigate the problem, although the shift away from the credit-intensive investment led growth model remains slow. Failure to reform its inefficient state-owned enterprise sector, and the continued worrying expansion of the real estate market, could also result in weaker prospects for medium term growth.

Eurasia: Rosneft ordered to finalise Bashneft purchase
Sectors: energy, hydrocarbons, finance
Key Risks: sanctions, market consolidation

On 6 October the Russian government issued a directive ordering Rosneft CEO Igor Sechin to finalise a purchase agreement for a 50.08 per cent stake of Bashneft by 15 October, with the order price limited to 330bln rubles (US$5.3bln). The figure is just above the 297-315bln ruble valuation commissioned from Ernst and Young. Rosneft has long been linked with a purchase of Bashneft, despite concerns it would make Western sanctions on Rosneft also applicable to Bashneft and reduce competition in the Russian hydrocarbons sector. After the sale is completed, Rosneft is expected to prepare for the privatisation of a 19.5 per cent stake in the combined company. However,  sanctions risk will likely deter Western investors, and questions about other’s appetite for such a purchase have made it difficult to price. Nevertheless, with one of Russia’s two sovereign wealth funds likely to dry up by the end of Q2 2017, the sale will be a priority.

Europe: tensions spike between Russia and NATO over Baltics missile deployment
Sectors: none  
Key Risks: security

Russia’s Defence Ministry announced on 8 October it would deploy Iskander-M rockets to Kaliningrad, the Russian enclave sandwiched between Lithuania and Poland. The two countries, as well as Germany, Estonia and Latvia, fiercely described the move as a major aggression, as have NATO officials. Iskander-M missiles can be fitted with a nuclear warhead and, from Kaliningrad, most of northern Germany, the Baltics and the populous southern areas of Scandinavia fall within their range. The move is likely to further escalate tensions in the region and comes amid NATO plans to increase troop and weapons deployments to Poland and the Baltic states. It could develop into a major stand-off in the event that nuclear warheads are also delivered to Kaliningrad, which some have described as a development that would be akin to the Cuban Missile Crisis.

MENA: alleged Saudi airstrike to prompt retaliatory attacks
Sectors: all      
Key Risks: terrorism, conflict

Huthi rebels and former Yemeni President Ali Abdullah Saleh called for attacks on Saudi Arabia following an alleged Saudi airstrike on a funeral ceremony in Sanaa that killed 140 people, reportedly the deadliest single incident in the conflict so far. Although Huthi-linked forces have regularly fired rockets, including a Yemeni developed variant of the Scud missile, into southern Saudi Arabia, their ability to conduct attacks in commercial areas is limited. However, there is potential for attacks to occur, particularly by groups associated with Islamic State (IS), and these could target commercial areas in major cities and Eastern Province. IS has claimed a number of attacks in Eastern Province, the location of the majority of the country’s oil infrastructure, over the last year. Infrequent incidents will remain small in scale and are most likely to target the local Shia’h minority.

Sub-Saharan Africa: shooting of senior opposition official threatens peace talks
Sectors: coal, agriculture
Key Risks: political instability, rebel attacks, civil unrest

On 8 October unidentified gunmen shot dead a senior official of Mozambique’s opposition RENAMO, Jeremias Pondeca, on a beach in Maputo. Pondeca was a member of the Joint Commission set up to resolve the deadlock between the government and RENAMO following disputed elections in 2014. The shooting came days before the commission was due to resume peace talks, which to date have reached no definitive agreement on any of the matters on its agenda, including RENAMO’s demand for six provincial governors and the inclusion of its militia in the army and police. It remains uncertain whether peace talks will resume following the shooting, and the incident is likely to block progress in negotiations. Absent a breakthrough in negotiations, sporadic retaliatory attacks, particularly in the north, will likely persist in the coming months with the potential to target commercial assets.