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Weekly investor research
13 November 2017
China typically undertakes at least one set of reforms for every stimulus undertaken in a typical developed country. Following the recently concluded Party Congress there is no reason to expect this pattern to change as officials announced last week that foreign banks will now be allowed to take majority stakes in Chinese financial institutions. We outline the main implications of China’s ‘big bang’. PDVSA, the Venezuelan national oil company, completed principal repayments of the 2020 and 2017N bonds last week despite severe market doubts. This week, attention turns to a pending coupon payment on the 2027 PDVSA bond and a meeting between bond holders and the government in Caracas. We see three main risks in the global backdrop: the rapid weakening of the UK government as an important Brexit deadline approaches, further delays to the implementation of a tax cut in the US and rising tensions in the Middle East.