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>Despite more than doubling in the past 4 years, the BSE-Sensex is fairly valued (trailing P/E of 24.04x) relative to its 10-year mean (23.93x)-- helped by sustained EPS growth. </li>
<li>The trailing P/E is above the 20-year (21.34x) and 30-year mean (20.4x), but those reflect weaker growth prospects in earlier decades. 10yr mean better reflects new normal 8% RGDP growth.  </li>
<li>Net FPI inflows reached a record USD10.14bn in Dec'23, when the market was similarly valued. FPI flows into equity were minimal in H1CY24, but likely to rebound. Stay moderately Overweight. </li>
</ul>


Despite more than doubling in the past 4 years, the BSE-Sensex is fairly valued (trailing P/E of 24.04x) relative to its 10-year mean (23.93x)-- helped by sustained EPS growth. 
The trailing P/E is above the 20-year (21.34x) and 30-year mean (20.4x), but those reflect weaker growth prospects in earlier decades. 10yr mean better reflects new normal 8% RGDP growth.  
Net FPI inflows reached a record USD10.14bn in Dec'23, when the market was similarly valued. FPI flows into equity were minimal in H1CY24, but likely to rebound. Stay moderately Overweight. 


India: Growth Ensures that the Market Is Not Too Expensive Despite Big 4yr Runup

Macroeconomics

<ul>
<li>11%YoY growth in GFCF enabled real GDP to grow 7.6% YoY in Q2FY24, well ahead of the 6.8% consensus. Manufacturing, construction, utilities and mining grew over 10%YoY in Jul-Sep'23. </li>
<li>Services should grow over 8%YoY in H2FY24 (in line with 26-year average). Manufacturing should grow 9%YoY, delivering 8%+ growth in H2FY24. Reform and productivity enable 8% growth in FY25. </li>
<li>The 12mma of the fiscal deficit fell to 5.8% of GDP in Oct'23, and should fall to 5.5% by Mar'24. This will crowd-in private investment, generating virtuous circle of growth.</li>
</ul>


11%YoY growth in GFCF enabled real GDP to grow 7.6% YoY in Q2FY24, well ahead of the 6.8% consensus. Manufacturing, construction, utilities and mining grew over 10%YoY in Jul-Sep'23. 
Services should grow over 8%YoY in H2FY24 (in line with 26-year average). Manufacturing should grow 9%YoY, delivering 8%+ growth in H2FY24. Reform and productivity enable 8% growth in FY25. 
The 12mma of the fiscal deficit fell to 5.8% of GDP in Oct'23, and should fall to 5.5% by Mar'24. This will crowd-in private investment, generating virtuous circle of growth.


India: Real GDP to Sustain 8%+ YoY Growth over the Next 18 Months

<ul>
<li>The National Democratic Alliance (NDA) led by PM Narendra Modi won its 3rd consecutive parliamentary majority (293 seats) although BJP fell short of a majority (unlike in 2014 and 2019).</li>
<li>Modi will take office on Friday, but will be dependent on the 16 and 12 MPs of Chandrababu Naidu's TDP and Nitish Kumar's JD(U) respectively, CMs of Andhra and Bihar. </li>
<li>Naidu is an economic reformer, who's likely to support labour-market reform and privatisation. BJP's social agenda (UCC, single nationwide election) will need to be shelved, but economic reform will advance. </li>
</ul>


The National Democratic Alliance (NDA) led by PM Narendra Modi won its 3rd consecutive parliamentary majority (293 seats) although BJP fell short of a majority (unlike in 2014 and 2019).
Modi will take office on Friday, but will be dependent on the 16 and 12 MPs of Chandrababu Naidu's TDP and Nitish Kumar's JD(U) respectively, CMs of Andhra and Bihar. 
Naidu is an economic reformer, who's likely to support labour-market reform and privatisation. BJP's social agenda (UCC, single nationwide election) will need to be shelved, but economic reform will advance. 


NDA (Not BJP) Wins 3rd Consecutive Term; Economic Reform Will Still Gain

<ul>
<li>RGDP grew 8.2% in FY24, led by 9% growth in GFCF. Stronger PCE (up only 4% in FY24), aided by rebounding rural consumption, should enable 8.5% RGDP growth in FY25.</li>
<li>Fiscal deficit contracted to 5.6% of GDP in FY24 (0.3pp of GDP lower than budgeted), aided by soaring direct tax and GST revenues. Lower FY25 deficit should crowd-in private investment.  </li>
<li>With CPI inflation likely falling below 4%YoY in Q2FY25, we expect a 25bp rate in Aug'24. A 6%-above-normal monsoon should lower food inflation and repo-rate, further boosting FY25 RGDP growth. </li>
</ul>


RGDP grew 8.2% in FY24, led by 9% growth in GFCF. Stronger PCE (up only 4% in FY24), aided by rebounding rural consumption, should enable 8.5% RGDP growth in FY25.
Fiscal deficit contracted to 5.6% of GDP in FY24 (0.3pp of GDP lower than budgeted), aided by soaring direct tax and GST revenues. Lower FY25 deficit should crowd-in private investment.  
With CPI inflation likely falling below 4%YoY in Q2FY25, we expect a 25bp rate in Aug'24. A 6%-above-normal monsoon should lower food inflation and repo-rate, further boosting FY25 RGDP growth. 


India: Real GDP to Accelerate to 8.5% Growth This FY from Last Year's 8.2%

Podcast by Ted Seides on Capital Allocators, Capital Allocators

Capital Allocators

Podcast by Ted Seides on Capital Allocators

Allocator and asset management expert, Ted Seides, conducts in-depth interviews with leaders in the institutional investing industry. Guests include Chief Investment Officers from leading allocators, asset managers, strategists, thought leaders, and many more. Our mission is to learn, share, and help implement the process of premier investors.

<ul><li>Dan Taniba moved to India 25 years ago, transitioning from the startup and venture capital world to public equities in 2007</li><li>Discussion covers challenges of venture capital, investing in India, and the case for public equities</li><li>Conversation delves into India capital's perspective on various aspects of investing, with examples and personal anecdotes interwoven throughout.</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</em></p>

Dan Taniba moved to India 25 years ago, transitioning from the startup and venture capital world to public equities in 2007Discussion covers challenges of venture capital, investing in India, and the case for public equitiesConversation delves into India capital's perspective on various aspects of investing, with examples and personal anecdotes interwoven throughout.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Dan Tennebaum - The Case for India at India Capital (EP.387)

India

iShares MSCI India Index ETF is an exchange-traded fund registered in Singapore. The Fund seeks to provide investment results that, before expenses, closely correspond to the performance of the MSCI India Index. The Fund invests all or substantially all of its assets in shares comprising the MSCI India Index in substantially the same weightings as constituted in the underlying index.

iShares MSCI India Index ETF (INDIA SP)

India: Growth Ensures that the Market Is Not Too Expensive Despite Big 4yr Runup

Sensex trailing P/E of 24.04x is near 10yr mean of 23.93x, reflecting sustained EPS growth. Net FPI inflows hit a record USD10bn in Dec'23, when...

Prasenjit K. Basu

India: Real GDP to Sustain 8%+ YoY Growth over the Next 18 Months

India stays world's fastest-growing economy with 7.7%YoY RGDP growth in H1FY24. Exports & GFCF will enable >8%YoY growth in H2. Labour reform to...

Prasenjit K. Basu

NDA (Not BJP) Wins 3rd Consecutive Term; Economic Reform Will Still Gain

NDA led by PM Modi wins 3rd consecutive majority, but BJP falls short. Modi dependent on TDP and JD(U) MPs for support. Economic reform likely to...

Prasenjit K. Basu

India: Real GDP to Accelerate to 8.5% Growth This FY from Last Year's 8.2%

RGDP grew 8.2% in FY24, led by 9% growth in GFCF. PCE, up just 4% in FY24, is set to rebound strongly in FY25, helped by La-Nina-driven strong...

Prasenjit K. Basu

Dan Tennebaum - The Case for India at India Capital (EP.387)

Dan moved to India 25 years ago, transitioning from startups and venture capital to public markets, sharing insights on his journey and experiences...

Capital Allocators

India: Growth Ensures that the Market Is Not Too Expensive Despite Big 4yr Runup

​Sensex trailing P/E of 24.04x is near 10yr mean of 23.93x, reflecting sustained EPS growth. Net FPI inflows hit a record USD10bn in Dec'23, when...

Prasenjit K. Basu

India: Real GDP to Sustain 8%+ YoY Growth over the Next 18 Months

India stays world's fastest-growing economy with 7.7%YoY RGDP growth in H1FY24. Exports & GFCF will enable >8%YoY growth in H2. Labour reform to...

Prasenjit K. Basu

NDA (Not BJP) Wins 3rd Consecutive Term; Economic Reform Will Still Gain

​NDA led by PM Modi wins 3rd consecutive majority, but BJP falls short. Modi dependent on TDP and JD(U) MPs for support. Economic reform likely to...

Prasenjit K. Basu

India: Real GDP to Accelerate to 8.5% Growth This FY from Last Year's 8.2%

RGDP grew 8.2% in FY24, led by 9% growth in GFCF. PCE, up just 4% in FY24, is set to rebound strongly in FY25, helped by La-Nina-driven strong...

Prasenjit K. Basu

Dan Tennebaum - The Case for India at India Capital (EP.387)

Dan moved to India 25 years ago, transitioning from startups and venture capital to public markets, sharing insights on his journey and experiences...

Capital Allocators

Sensex trailing P/E of 24.04x is near 10yr mean of 23.93x, reflecting sustained EPS growth. Net FPI inflows hit a record USD10bn in Dec'23, when...

NDA led by PM Modi wins 3rd consecutive majority, but BJP falls short. Modi dependent on TDP and JD(U) MPs for support. Economic reform likely to...