Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<ul>
<li>Given public debt of 248% of GDP, inflation (however generated) is a solid net positive for Japan, boosting government revenue and reducing the fiscal deficit &amp; public debt/GDP ratios. </li>
<li>The depreciated Yen (at a 14-year low at end-June) is a boon for exports and import-competing manufacturers. Despite Kuroda's jawboning, the Yen is likely to stay weak, boosting Japan's manufacturers. </li>
<li>The equity market is trading at 14.1x, far below its 10-year mean PE of 21.3x. The dominance of exporters should bolster index earnings. Japan will be a winning equity bet. </li>
</ul>


Given public debt of 248% of GDP, inflation (however generated) is a solid net positive for Japan, boosting government revenue and reducing the fiscal deficit &amp; public debt/GDP ratios. 
The depreciated Yen (at a 14-year low at end-June) is a boon for exports and import-competing manufacturers. Despite Kuroda's jawboning, the Yen is likely to stay weak, boosting Japan's manufacturers. 
The equity market is trading at 14.1x, far below its 10-year mean PE of 21.3x. The dominance of exporters should bolster index earnings. Japan will be a winning equity bet. 


Japan: The Winner from This Year's Spurt of Inflation

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>OVERSEAS.  SPX500 fell on Friday, and closed -2.3%WoW;  July jobs report showed cooling in the labor market;  Apple -4.8% weighed on market sentiment; Reports that Buffet buying short dated UST.</li>
<li>JAPAN. NKY Futures -0.8% vs Cash; USDJPY 141.8; Strong JP earning season so far- NP +20%YoY; Investors favor Japan&gt;  China;  Oasis's Fischer says still more to be done with Governance.</li>
<li>NUGGET. Honda is ahead of their motorcycle electrification strategy vs Japanese competitors.  With the #1 global share and 2.7 trillion yen in sales, they CANNOT afford to be left behind.</li>
</ul>


OVERSEAS.  SPX500 fell on Friday, and closed -2.3%WoW;  July jobs report showed cooling in the labor market;  Apple -4.8% weighed on market sentiment; Reports that Buffet buying short dated UST.
JAPAN. NKY Futures -0.8% vs Cash; USDJPY 141.8; Strong JP earning season so far- NP +20%YoY; Investors favor Japan&gt;  China;  Oasis's Fischer says still more to be done with Governance.
NUGGET. Honda is ahead of their motorcycle electrification strategy vs Japanese competitors.  With the #1 global share and 2.7 trillion yen in sales, they CANNOT afford to be left behind.


Ohayo Japan| SPX -2.3%WoW; Buffett Buying UST; NUGGET:Motorcycle Electrification - Honda Roars Ahead

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.</li>
<li>We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI <a href="https://www.smartkarma.com/entities/ishares-msci-acwi-etf" target="_blank" data-smartkarma-citation="entities:24402:1" rel="noopener">iShares MSCI ACWI ETF (ACWI US)</a> .</li>
<li>$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US</li>
</ul>


Global equities are under some pressure after Fitch downgraded the United States' credit rating to AA+ from AAA.
We expect that this is a normal 3%-6% pullback to the 50-day MA or major $93 support level on the MSCI ACWI iShares MSCI ACWI ETF (ACWI US) .
$TNX is below 4.1%-4.3% and DXY remains in an 8-month downtrend; as long as this remains true, we'd buy on a pullback to the 50-day MA and/or $93 on ACWI-US


Normal Pullback, or Something More?; Watching Resistance on DXY and 10-Yr Treasury Yield; Value Buys

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Equity Bottom-Up

<ul><li>Toyota Motor Corp., the world’s biggest car seller, has announced plans to consolidate its research and development (R&amp;D) resources in China and ramp up its focus on electric vehicles (EVs), as it attempts to revive stalling sales in the highly competitive market.</li><li>The Japanese automaker said on Monday it would change the name of its largest R&amp;D facility in China from Toyota Motor Engineering &amp; Manufacturing (China) Co. Ltd. to Intelligent ElectroMobility R&amp;D Center by TOYOTA (China) Co. Ltd., and consolidate engineers from its three China ventures into the newly named facility based in Changshu, Jiangsu province.</li><li>Among other plans, it would also strengthen local development of electrified vehicles (EVs) including battery, hybrid and plug-in hybrid models and accelerate the development of an electric powertrain with its two biggest suppliers, Denso Corp. and Aisin Corp., the company said.</li></ul>

Toyota Motor Corp., the world’s biggest car seller, has announced plans to consolidate its research and development (R&amp;D) resources in China and ramp up its focus on electric vehicles (EVs), as it attempts to revive stalling sales in the highly competitive market.The Japanese automaker said on Monday it would change the name of its largest R&amp;D facility in China from Toyota Motor Engineering &amp; Manufacturing (China) Co. Ltd. to Intelligent ElectroMobility R&amp;D Center by TOYOTA (China) Co. Ltd., and consolidate engineers from its three China ventures into the newly named facility based in Changshu, Jiangsu province.Among other plans, it would also strengthen local development of electrified vehicles (EVs) including battery, hybrid and plug-in hybrid models and accelerate the development of an electric powertrain with its two biggest suppliers, Denso Corp. and Aisin Corp., the company said.

Toyota to Ramp Up Electric Car Push in China With R&D Revamp

<ul>
<li>OVERSEAS. Fitch downgrade spurs risk off as S&amp;P 500 and Nasdaq 100 sold off;  US Treasuries sold off as well, but note new Treasury issuance are indeed coming </li>
<li>JAPAN. NKY  Futures -1.1% vs cash; USDJPY 143.4;  Japan had most of the selling yesterday but could see some follow-through;  EARNINGS; TDK, Sumi Elect misses; TOB: Itochu takes CTC private</li>
<li>NUGGET. ANA(9202) to begin offsetting GHG via the purchase of carbon credits. We estimate that if DAC  removes 10% of its emissions, 70% of OP will disappear!  Bears watching. </li>
</ul>


OVERSEAS. Fitch downgrade spurs risk off as S&amp;P 500 and Nasdaq 100 sold off;  US Treasuries sold off as well, but note new Treasury issuance are indeed coming 
JAPAN. NKY  Futures -1.1% vs cash; USDJPY 143.4;  Japan had most of the selling yesterday but could see some follow-through;  EARNINGS; TDK, Sumi Elect misses; TOB: Itochu takes CTC private
NUGGET. ANA(9202) to begin offsetting GHG via the purchase of carbon credits. We estimate that if DAC  removes 10% of its emissions, 70% of OP will disappear!  Bears watching. 


Ohayo Japan|Fitch Downgrade Spurs Global Risk Off; NUGGET: ANA(+JAL) - Direct Air Capture, Not Cheap

Japan

Toyota Motor Corporation manufactures, sells, leases, and repairs passenger cars, trucks, buses, and their related parts worldwide. The Company also operates financing services through their subsidiaries. Toyota Motor builds homes, produces pleasure boats, and develops intelligent transportation systems including radar cruise control and electronic toll collection systems.

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Toyota Motor (7203 JP)

Japan: The Winner from This Year's Spurt of Inflation

13 months ago, Japan was attractive as inflation had returned but wages had not started rising, but were eventually expected to. Now a wage...

Prasenjit K. Basu

Ohayo Japan| SPX -2.3%WoW; Buffett Buying UST; NUGGET:Motorcycle Electrification - Honda Roars Ahead

JAPAN. NKY Futures -0.8% vs Cash; USDJPY 141.8; Strong JP earning season so far- NP +20%YoY; Global Investors favor Japan over China; Oasis's...

Mark Chadwick

Normal Pullback, or Something More?; Watching Resistance on DXY and 10-Yr Treasury Yield; Value Buys

Normal Pullback, or Something More for global equities?; Watch Resistance on $DXY and 10-Yr Treasury Yield; Value Buys in Consumer Discretionary...

Vermilion Research

Toyota to Ramp Up Electric Car Push in China With R&D Revamp

Toyota Motor Corp., the world’s biggest car seller, has announced plans to consolidate its research and development (R&D) resources in China...

Caixin Global

Ohayo Japan|Fitch Downgrade Spurs Global Risk Off; NUGGET: ANA(+JAL) - Direct Air Capture, Not Cheap

Fitch downgrade spurs risk off; NKY Futures -1.1% vs cash; USDJPY 143.4; Japan likely sees some follow-through on yesterday's sell-off; ...

Mark Chadwick

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