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

Thematic (Sector/Industry)

The US has returned to divided government, after two years in which the Republicans controlled all branches of government. The Republican majority in the Senate is likely to be even larger than in the last 2 years, but the House of Representatives (which has to approve budgets) will have a clear Democratic majority. The clearest implication will be that the president's fiscal stimulus will begin to be pulled back, which will be negative for US growth -- and will contribute toward flattening (and eventually inverting) the yield curve. The House majority will focus on: (a) reinforcing the Affordable Care Act (Obamacare); (b) rebuilding infrastructure (which will be stimulative, and an area where Trump could cooperate); (c) seek to increase taxes on the rich and corporates (i.e., roll back Trump's big tax cut of December 2017). Additionally, there will be investigations (using subpoenas) of Trump's tax returns, and of Trump's collusion with Russia in the 2016 election. Trump will be under much greater pressure over the Mueller investigation.However, the risk of impeachment has declined sharply, since the Republican majority in the Senate has increased -- and any impeachment by the House will collapse quickly in the Senate. Robert Mueller is likely to be stronger, and the outcome of his investigation will tilt the balance of power between Trump and the Democratic House in favour of the latter in 1H 2019. Consequently, we expect the US yield curve to invert by 2Q 2019, and a US recession is now a strong probability by mid-2020, timed for the height of the next presidential election.

The US has returned to divided government, after two years in which the Republicans controlled all branches of government. The Republican majority in the Senate is likely to be even larger than in the last 2 years, but the House of Representatives (which has to approve budgets) will have a clear Democratic majority. The clearest implication will be that the president's fiscal stimulus will begin to be pulled back, which will be negative for US growth -- and will contribute toward flattening (and eventually inverting) the yield curve. The House majority will focus on: (a) reinforcing the Affordable Care Act (Obamacare); (b) rebuilding infrastructure (which will be stimulative, and an area where Trump could cooperate); (c) seek to increase taxes on the rich and corporates (i.e., roll back Trump's big tax cut of December 2017). Additionally, there will be investigations (using subpoenas) of Trump's tax returns, and of Trump's collusion with Russia in the 2016 election. Trump will be under much greater pressure over the Mueller investigation.However, the risk of impeachment has declined sharply, since the Republican majority in the Senate has increased -- and any impeachment by the House will collapse quickly in the Senate. Robert Mueller is likely to be stronger, and the outcome of his investigation will tilt the balance of power between Trump and the Democratic House in favour of the latter in 1H 2019. Consequently, we expect the US yield curve to invert by 2Q 2019, and a US recession is now a strong probability by mid-2020, timed for the height of the next presidential election. 

House Loss Is a Mild Setback for Trump; Yield Curve Likely to Flatten as Fiscal Challenges Emerge

Lane Research

Douglas Lane

Independent Insight Provider

Lane Research is a boutique fundamental equity research firm focusing on companies that employ a direct to consumer business model. This is an area where we have had extensive experience over the years, going back to the mid-1990s when Amway Asia Pacific, Amway Japan and Nu Skin originally listed on the New York Stock Exchange. We think Direct Selling in particular supports many favorable consumer macro-trends such as leveraging today’s technology to advance social selling and workplace flexibility, and the move towards shopping away from a fixed retail location. Our proprietary financial modeling coupled with our decades of experience and contacts within this unique business model leave us well positioned to provide alpha to investors interested in the space. Lane Research does not have any trading or investment banking operations, fully aligning our objectives with our clients.

Experience includes:

-9 equity analyst awards, including Starmine's #2 stock picker in 2011 for Household Durables & #1 earnings estimator in 2010 for Personal Products, and The Wall Street Journal's #1 stock picker in 2004 & 2006 for Household Products. 

-Financial TV appearances including CNBC and Bloomberg

-Quotes in financial publications such as Wall St Journal, Investors Business Daily and Barron's, and newswires such as Reuters and the Associated Press

-Chartered Financial Analyst since 1992 and member of the CFA Society Boston

-FINRA Series 7, 63, 86 & 87

After 4 quarters of largely favorable currency comparisons for the Direct Selling companies we follow, <a href="https://www.smartkarma.com/entities/4527" target="_blank" data-smartkarma-citation="entities:4527:1">Avon Products (AVP US)</a>,  <a href="https://www.smartkarma.com/entities/6216" target="_blank" data-smartkarma-citation="entities:6216:1">Herbalife Ltd (HLF US)</a>, <a href="https://www.smartkarma.com/entities/10036" target="_blank" data-smartkarma-citation="entities:10036:1">Medifast Inc (MED US)</a>, <a href="https://www.smartkarma.com/entities/12451" target="_blank" data-smartkarma-citation="entities:12451:1">Nu Skin Enterprises Inc A (NUS US)</a>, <a href="https://www.smartkarma.com/entities/7022" target="_blank" data-smartkarma-citation="entities:7022:1">Tupperware Brands (TUP US)</a> and <a href="https://www.smartkarma.com/entities/15961" target="_blank" data-smartkarma-citation="entities:15961:1">Usana Health Sciences (USNA US)</a> , with the strengthening of the dollar this year it looks like the 2018 3Q foreign exchange impact will return to being a headwind for these largely international companies.  However, there could be large differences in the magnitude of the headwind among the companies we follow depending on geographic mix.

After 4 quarters of largely favorable currency comparisons for the Direct Selling companies we follow, Avon Products (AVP US),  Herbalife Ltd (HLF US), Medifast Inc (MED US), Nu Skin Enterprises Inc A (NUS US), Tupperware Brands (TUP US) and Usana Health Sciences (USNA US) , with the strengthening of the dollar this year it looks like the 2018 3Q foreign exchange impact will return to being a headwind for these largely international companies.  However, there could be large differences in the magnitude of the headwind among the companies we follow depending on geographic mix.

Direct Selling Sector Analysis: Currency Exchange Moves to Headwind in 3Q

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

Technical Analysis

Invesco DB US Dollar Index Bul / Technical Analysis

DXY is ending a 5-wave rally off the February low.  For clearer completion, we need to see a smaller 5-waver up from the 14th June low finish off properly, and in doing so it should make targets at 95.87-97.52.  A 3-5 point correction should follow, and bearish divergence is forming in the weekly and daily indicators to confirm that risk.However, if we are left with a clear 5-waver of about 8 points up from 88, it would suggest at least one more rally leg to come, possibly two.  If the latter…

DXY is ending a 5-wave rally off the February low.  For clearer completion, we need to see a smaller 5-waver up from the 14th June low finish off properly, and in doing so it should make targets at 95.87-97.52.  A 3-5 point correction should follow, and bearish divergence is forming in the weekly and daily indicators to confirm that risk.However, if we are left with a clear 5-waver of about 8 points up from 88, it would suggest at least one more rally leg to come, possibly two.  If the latter…

US Dollar:  Rally from February Is in Its Later Stages

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Macroeconomics

We conclude five points about Global Liquidity in 2018:<ul><li> Global Liquidity will expand by around US$5 trillion net in 2018. This is still a positive rise, but it is one-third of the 2017 pace. 2017 proved a spectacular year for inflows</li><li>Threats of US Fed and ECB Reverse QE or ‘quantitative squeezing’ will be offset by net expansion of Central Bank balance sheets in EM and Japan</li><li>Reverse QE by Central Banks is not helpful, but cross-border flows pose by far the bigger threat for asset markets this year</li><li>China (27% share) is the most important economy for Global Liquidity, both directly and indirectly through its impact on the Emerging Market flows</li><li>At a 66% share of liquidity flows, the US dollar (with its surrogates) remains de facto the most important currency Worldwide. But if the Chinese Yuan is included based on China’s economic importance, it would immediately take a 26% point market share away from the US dollar. Gold would soar in price?</li></ul>

We conclude five points about Global Liquidity in 2018: Global Liquidity will expand by around US$5 trillion net in 2018. This is still a positive rise, but it is one-third of the 2017 pace. 2017 proved a spectacular year for inflowsThreats of US Fed and ECB Reverse QE or ‘quantitative squeezing’ will be offset by net expansion of Central Bank balance sheets in EM and JapanReverse QE by Central Banks is not helpful, but cross-border flows pose by far the bigger threat for asset markets this yearChina (27% share) is the most important economy for Global Liquidity, both directly and indirectly through its impact on the Emerging Market flowsAt a 66% share of liquidity flows, the US dollar (with its surrogates) remains de facto the most important currency Worldwide. But if the Chinese Yuan is included based on China’s economic importance, it would immediately take a 26% point market share away from the US dollar. Gold would soar in price?

'Quantitative Squeezing': Prospects for Global Liquidity in 2018

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.

We provide a technical appraisal of major commodities and currencies.  Metals, with the exception of gold and silver, have staged impressive rallies this year.  Oil is breaking out from a a multi-year base, and looks poised to move higher.  Charts and analysis on the world's major currencies is also included.

We provide a technical appraisal of major commodities and currencies.  Metals, with the exception of gold and silver, have staged impressive rallies this year.  Oil is breaking out from a a multi-year base, and looks poised to move higher.  Charts and analysis on the world's major currencies is also included.

Commodities and Currencies: A Technical Perspective

United States

Invesco DB US Dollar Index Bullish Fund is an exchange-traded fund incorporated in the USA. The Fund seeks to follow the Deutsche Bank Long USD Currency Portfolio Index which tracks the performance of the U.S. dollar relative to a basket of the six major world currencies - the euro, Japanese yen, British pound, Canadian dollar, Swedish krona & Swiss franc.

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Invesco DB US Dollar Index Bul (UUP US)

House Loss Is a Mild Setback for Trump; Yield Curve Likely to Flatten as Fiscal Challenges Emerge

The US has returned to divided government, after two years in which the Republicans controlled all branches of government. The Republican majority...

Prasenjit K. Basu

Direct Selling Sector Analysis: Currency Exchange Moves to Headwind in 3Q

After 4 quarters of largely favorable currency comparisons for the Direct Selling companies we follow, Avon Products (AVP US), Herbalife Ltd (HLF...

Douglas Lane

US Dollar: Rally from February Is in Its Later Stages

DXY is ending a 5-wave rally off the February low. For clearer completion, we need to see a smaller 5-waver up from the 14th June low finish off...

Peter Beuttell

'Quantitative Squeezing': Prospects for Global Liquidity in 2018

We conclude five points about Global Liquidity in 2018: Global Liquidity will expand by around US$5 trillion net in 2018. This is stilla positive...

Michael J. Howell

Commodities and Currencies: A Technical Perspective

We provide a technical appraisal of major commodities and currencies. Metals, with the exception of gold and silver, have staged impressive...

Vermilion Research

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