Americas: Cuba’s revolutionary leader dies
Sectors: all
Key Risks: political stability; travel and road disruption

In Cuba, the coming week will be marked by massive commemoration events following the death of the leader of the island’s socialist revolution Fidel Castro on 25 November. A nine-day mourning period began on 26 November. Thousands are expected at Plaza de la Revolución in the capital Havana on 28 and 29 November to pay their respects to Castro at the Jose Marti Memorial. Castro’s ashes will be then taken to Santiago de Cuba in a funeral procession departing from Havana on 30 November. Another rally is expected on 3 December in Santiago de Cuba, where the ashes will be interred. Cuba’s President Raul Castro, Fidel’s brother, is expected to remain in power until 2018 and to lead and orderly and controlled transition. Political violence and unrest will remain unlikely, although travel and road disruption should be expected over the coming days.

Asia-Pacific: Opposition to Modi’s mass demonetisation increases
Sectors: all
Key Risks: economic risks; protests

Opposition to the New Delhi’s surprise decision earlier this month to cancel over 85 per cent of the notes in circulation (by value) to reduce tax evasion continues to grow. The move has been opposed former Prime Minister Manmohan Singh, former RBI governor Raghuram Rajan, major opposition parties, and there are likely to be consistent small scale protests over the next few days. Over the short term consumption suffer and growth could decrease by between 1 and 2 percentage points in 2016. There is also a risk that demonetisation could harm Modi’s support amongst the ‘trader’ class, threatening his ability to pursue further structural reform. However, thus far the government appears to have sufficient popular backing for the move – and in the medium term the decision will push more India’s to open up bank accounts, and increase government revenue.

Eurasia: First domestic oil IPO in ten years highlights political risks
Sectors: energy
Key Risks: sanctions; state interference; rule of law

Russneft launched the first domestic oil company IPO in 10 years. 20 per cent of the firm was sold at 550 rubles per share. The IPO valued the company at 162bln rubles (US$2.49bln). Russneft was wholly-owned by businessman Mikhail Gutseriev, who has previously quarreled with the Kremlin but has witnessed a strong revival of fortunes in recent years. 90 per cent reportedly went to domestic investors. Local media claimed interested foreign investors were largely Asia-based. US President-elect Donald Trump has not laid out a policy on Russian sanctions, although foreign demand for Russian investments could increase in the event he does. EU sanctions are also seen as increasingly likely to easen. Nevertheless, even in the event of a major uptick in relations, Russian energy assets are likely to continue to trade at a discount compared to foreign competitors as foreign investors retain concerns over political interference.

Europe: concerns over banking and political stability grow ahead of Italian referendum
Sectors: banking
Key Risks: political stability; solvency

Italian officially reportedly fear up to eight Italian banks risk failure in the event Prime Minister Matteo Renzi resigns following the 4 December constitutional referendum. Polls have shown the referendum is increasingly unlikely to pass. Renzi’s resignation would likely result in early elections that could see the populist Five Star Movement become the largest party. Major italian banks such as Monte dei Paschi di Siena, which has seen so-called ‘bail in’ efforts stumble, have seen share prices evaporate in recent months amid continued fears. Any significant political uncertainty could immediately threaten their solvency. Italian political instability could also impact the EU, particularly if the Five Star Movement, which has indicated it would support replacing the Euro and potentially holding a referendum on EU membership, comes to power, although it will likely face major difficulty forming a coalition.

MENA: Further successes likely in Syrian government effort to retake rebel-held Aleppo
Sectors: utilities, healthcare, humanitarian crisis
Key Risks: civil war; terrorism; economic instability

Syrian government forces and its allies including units sponsored by Iran and units from Lebanese Hizbullah made strong progress in retaking several rebel-held neighbourhoods in eastern Aleppo. This follows a concerted aerial campaign against military and civilians targets in eastern Aleppo in the last several weeks. Progress may slow briefly over the course of this week’s offensive as mine- and IED-clearing operations necessary to consolidate territory will be extensive. Another humanitarian crisis will develop in the Kurdish-held neighbourhood of Shaykh Maqsud. This likely marks the beginning of the final phase and ultimately the end of the civil war in Aleppo. However, violence will continue for now and there is potential for violence between Syrian and Kurdish sides to escalate in the coming weeks.

Sub-Saharan Africa: South Africa contends with credit rating downgrade
Sectors: SOEs; finance
Key Risks: sovereign rating downgrade; political instability; economic recession; tightening credit conditions

On 25 November South Africa narrowly avoided a credit rating downgrade to junk status after rating agencies Fitch and Moody’s affirmed the country’s sovereign ratings, albeit the former with a negative outlook. However, they expressed concern over the impact of political infighting and uncertain policy direction on South Africa’s economic prospects. President Jacob Zuma has been at the centre of numerous corruption scandals, most recently the public protector’s ‘state capture’ report, which implicated him in undue relations with the wealthy Gupta family. Tensions between embattled President Zuma and Finance Minister Pravin Gordhan have also concerned investors. On 28 November the National Executive Committee announced that Zuma would face a no confidence vote, the most notable test to Zuma’s incumbency to date. Standard & Poor’s is expected to publish its ratings decision on 2 December.