Americas: uncertainty grows as Colombians reject FARC peace deal
Sectors: all
Key Risks: insurgency; terrorism; political instability

In Colombia, the coming weeks will be crucial to lower the levels of uncertainty sparked after Colombians unexpectedly rejected the final peace deal signed between the government and the FARC in a national referendum on 2 October. With a 37 per cent turn out, 50.2 per cent voted against the deal, contrary to what all polls indicated ahead of the vote. While a return to hostilities remains unlikely, the peace process’ next steps nevertheless remain unclear. The peace deal as it is cannot be implemented and any renegotiation will likely extend over the coming months, adding uncertainty as to exactly when the FARC’s disarmament and demobilisation would begin. The economic benefits of peace are also likely to be delayed.

Asia-Pacific: political problems endanger Philippines’ economic successes
Sectors: all
Key Risks: political instability

Over the coming months political issues will continue weighing on the Philippines’ economic prospects. The issues are primarily linked to the newly elected President Rodrigo Duterte’s antagonistic comments towards the US and to alleged human-rights abuses committed during Duterte’s war on crime. Most recently Duterte sparked international condemnation by seemingly comparing himself to Hitler. The problems have caused foreign investors to abandon the country’s stock market in droves, pushing the peso to a seven-year low. Duterte’s divisive policies could even lead to a coup attempt over the next 1-2 years. However, the IMF recently revised its 2016-17 growth forecast for the Philippines upwards to 6.55 per cent, and the country’s macroeconomic fundamentals remain sufficient to significantly cushion the impact of any potential political instability.

Eurasia: reports that Rosneft may purchase majority stake in Bashneft
Sectors: energy, oil and gas
Key Risks: consolidation of Russian energy sector, sanctions risk

Russian State-owned oil company Bashneft is likely to be sold directly to majority state-owned Rosneft. Reports indicating as much correspond with Lukoil president Vagit Alekperov’s comments that a rumoured price tag of US$5.3bln is too expensive  for a 50.08% of the Bashkortostan-based company. Lukoil was seen as the main competitor interested in the purchase, Bashneft was nationalised two years ago after previous owner Vladimir Yevtushenkov refused to sell. A direct acquisition of Bashneft by Rosneft would further the consolidation of the Russian oil industry. Reports Rosneft would buy Bashneft caused a delay in the expected tender of 19.5% of Rosneft, which is currently the largest state-owned firm by market capitalisation. The Kremlin will still maintain a majority stake in Rosneft even after the expected tender and it is likely to continue to prioritise political interests above pure business matters. .

Europe: Deutsche Bank races to reach political settlement in US while under pressure at home
Sectors: finance, all
Key Risks: shock to European banking sector, contagion

Tensions around Deutsche Bank remain high, with Germany’s Economy Minister and Vice-Chancellor, Sigmar Gabriel, fiercely criticising the bank, while many of Germany’s largest firms issued statements supporting it. Gabriel is the head of Germany’s Social Democratic Party and his statements are more concerning for the likelihood of the bank receiving a bailout, should it be needed, than last week’s media rumours that Merkel refused to do so. Deutsche Bank’s shares fell to record lows last week amid reports it faced a US$14bln fine by the US Department of Justice. Reports on 30 September that the final settlement with the US would be closer to US$5bln boosted its shares. Net shorts against Deutsche indicate there is a risk of major market turbulence without a settlement.

MENA: risks to civilians to increase in the Sinai peninsula
Sectors: state-linked assets, military personnel
Key Risks: terrorism

There has been a sharp increase in incidents of militants in the Sinai peninsula targeting civilians in recent weeks. It has included employees at state-linked firms, although other civilians have been caught in the crossfire in several incidents. At least four workers of a state electrical company were killed and two others injured by an IED targeting a vehicle transporting them to work in the west of al-Arish city in northern Sinai. On 1 October, five conscripts in the Central Security Forces (CSF) were killed during an ambush on their private vehicle by militants suspected to be members of the Islamic State (IS) affiliate Wilayat Sina (WS). Targeting of civilians is likely to increase further, both as bystanders to military personnel and as specific targets this week and beyond.

Sub-Saharan Africa: latest violent episode to increase international pressure on Ethiopia government
Sectors: all
Key Risks: civil unrest,

At least 52 people were killed on 2 October when the security services opened fire during a religious festival in the Oromia region, sparking a stampede in which many were killed. Some sources put the death toll far higher. Prime Minister Hailemariam Desalegn denied claims police shot at the protesters. The incident marks one of the most deadly of enduring anti-government protests in the region, and is likely to attract international scrutiny. There is also a high risk that protests in Oromia will intensify and become more violent, while renewed protests are also likely in Amhara region, whose people have also been protesting over their economic and political marginalisation. The government has so far given minimal concessions, but a continuation of its current militarised response will not solve protesters’ grievances and likely prolong the crisis.