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 Bangladesh Taka has, like the Vietnamese Dong, been among the world's most stable currencies over the past 7 years. With real GDP growing 7.9% YoY in the last fiscal year (ending 30 June 2018), and exports continuing to soar (up 14.8% YoY in the latest quarter), Bangladesh is likely to remain one of the world's fastest-growing economies in 2019, notching up the fourth consecutive year of 7%-plus real GDP growth. Lower oil prices are likely to strengthen the current account (bringing the deficit down to 1.5% of GDP this year), bolstering foreign reserves to well over the current 10 months' import cover. With inflation likely to be below 5% YoY by March, we expect the policy interest rate to decline by 25bp (from 6% currently) by mid-2019. Sheikh Hasina Wazed was re-elected to her third consecutive term as Prime Minister after the 30th December general election, as her party won 257 of the 300 seats -- and her electoral alliance won 288. Her ally, ex-president Ershad's Jatiya (national) Party (a member of Hasina's alliance) became the second-largest party in parliament -- and, crucially, decided to join the coalition government, lending it extra credibility. Although most foreign observers praised the election, there were irregularities (including intimidation, and possibly some ballot-stuffing) reported by local newspapers. However, the emasculated opposition is unlikely to be able to mount a serious challenge against the outcome, as the AL-led alliance does command majority support in the country, and the main opposition BNP remains discredited by its 2001-06 performance. A market sell-off after mid-2018 reflected uncertainty about the electoral outcome, but a sharp rally has begun in the new year. The market is trading at 15x trailing earnings -- i.e., at the lower end of its 10-year trading range. Given that Bangladesh is a much more stable and faster-growing economy than Pakistan (which was recently re-elevated to Emerging Market status from the Frontier category), we expect that Bangladesh will become a candidate for inclusion in MSCI's Emerging Market indices within the next two years. Bangladesh's foreign reserves provide a solid cushion of 10 months' import cover -- far more than Pakistan, or other frontier markets like Vietnam or Argentina. We would recommend investors go strongly Overweight Bangladesh in Frontier Market portfolios.

The Bangladesh Taka has, like the Vietnamese Dong, been among the world's most stable currencies over the past 7 years. With real GDP growing 7.9% YoY in the last fiscal year (ending 30 June 2018), and exports continuing to soar (up 14.8% YoY in the latest quarter), Bangladesh is likely to remain one of the world's fastest-growing economies in 2019, notching up the fourth consecutive year of 7%-plus real GDP growth. Lower oil prices are likely to strengthen the current account (bringing the deficit down to 1.5% of GDP this year), bolstering foreign reserves to well over the current 10 months' import cover. With inflation likely to be below 5% YoY by March, we expect the policy interest rate to decline by 25bp (from 6% currently) by mid-2019. Sheikh Hasina Wazed was re-elected to her third consecutive term as Prime Minister after the 30th December general election, as her party won 257 of the 300 seats -- and her electoral alliance won 288. Her ally, ex-president Ershad's Jatiya (national) Party (a member of Hasina's alliance) became the second-largest party in parliament -- and, crucially, decided to join the coalition government, lending it extra credibility. Although most foreign observers praised the election, there were irregularities (including intimidation, and possibly some ballot-stuffing) reported by local newspapers. However, the emasculated opposition is unlikely to be able to mount a serious challenge against the outcome, as the AL-led alliance does command majority support in the country, and the main opposition BNP remains discredited by its 2001-06 performance. A market sell-off after mid-2018 reflected uncertainty about the electoral outcome, but a sharp rally has begun in the new year. The market is trading at 15x trailing earnings -- i.e., at the lower end of its 10-year trading range. Given that Bangladesh is a much more stable and faster-growing economy than Pakistan (which was recently re-elevated to Emerging Market status from the Frontier category), we expect that Bangladesh will become a candidate for inclusion in MSCI's Emerging Market indices within the next two years. Bangladesh's foreign reserves provide a solid cushion of 10 months' import cover -- far more than Pakistan, or other frontier markets like Vietnam or Argentina. We would recommend investors go strongly Overweight Bangladesh in Frontier Market portfolios. 

Hasina Retains Power, Spurred by One of the World's Fastest-Growing Economies: Buy Bangladesh

Bangladesh

Lafarge Surma Cement Ltd. produces and markets cement.  The Company quarries raw materials such as limestone and shale.

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Lafarge Surma Cement (LAFCEM BD)

Hasina Retains Power, Spurred by One of the World's Fastest-Growing Economies: Buy Bangladesh

The Bangladesh Taka has, like the Vietnamese Dong, been among the world's most stable currencies over the past 7 years. With real GDP growing 7.9%...

Prasenjit K. Basu

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