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

Macroeconomics

<ul>
<li>The exceptional Covid-induced monetary and fiscal stimulus is being wound down, but not fast enough. Fiscal deficits averaged 10% of GDP for 4 years, far larger and longer than 2009-11.  </li>
<li>QT was abandoned in Jul'23, and M2 has contracted at a modest pace. Upside growth surprises are thus likely to continue, and will require Q2CY24 M2 to decline more sharply. </li>
<li>Once core CPE inflation abates below 2.5%YoY (likely Jun'24) the first 25bp rate cut will occur at the Jul'24 FOMC, then similar cuts in Sep'24 and Dec'24. Benign for markets. </li>
</ul>


The exceptional Covid-induced monetary and fiscal stimulus is being wound down, but not fast enough. Fiscal deficits averaged 10% of GDP for 4 years, far larger and longer than 2009-11.  
QT was abandoned in Jul'23, and M2 has contracted at a modest pace. Upside growth surprises are thus likely to continue, and will require Q2CY24 M2 to decline more sharply. 
Once core CPE inflation abates below 2.5%YoY (likely Jun'24) the first 25bp rate cut will occur at the Jul'24 FOMC, then similar cuts in Sep'24 and Dec'24. Benign for markets. 


Rate-Cutting Agenda Stays, Growth Buoyed by Massive Fiscal Stimulus

Steno Research

Elias Lisberg Glistrup

Macro and Geopolitical Research House

Steno Research is a new macro and geopolitical research house. We are based out of Copenhagen, Denmark, but have an international team and a strong network of sources and partners around the world. The team is lead by Andreas Steno, previous global head of strategy at Nordea Bank, and Mikkel Rosenvold, former chief consultant in the Danish Ministry of Finance.

<ul><li>Welcome to the Emerging Market Series, this week covering the rotating capital flows away from Japan and its significance for China and Emerging AsiaWatch a condensed version of the key findings from this article on video.</li><li><span style="font-weight: 400;">Recovering from the ‘lost decades’ Japanese equities have been out of favor and continuously underperforming global benchmarks. </span></li><li><span style="font-weight: 400;">For 2023 however, the Nikkei 225 actually outperformed the S&amp;P 500, returning 28% vs. 24% respectively, and the euphoria around Japan returning to normalcy in terms of structural inflation, growth and its feasibility as an investment has continued into 2024 (Nikkei vs. SPX ≈ 15% vs. 8.5%). </span></li></ul>

Welcome to the Emerging Market Series, this week covering the rotating capital flows away from Japan and its significance for China and Emerging AsiaWatch a condensed version of the key findings from this article on video.Recovering from the ‘lost decades’ Japanese equities have been out of favor and continuously underperforming global benchmarks. For 2023 however, the Nikkei 225 actually outperformed the S&amp;P 500, returning 28% vs. 24% respectively, and the euphoria around Japan returning to normalcy in terms of structural inflation, growth and its feasibility as an investment has continued into 2024 (Nikkei vs. SPX ≈ 15% vs. 8.5%). 

Rotating EM Flows: From Japan to Emerging Asia

Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Cross Asset Strategy

<ul><li>Throughout 2024, we’ve witnessed tight trading ranges across various markets: oil, FX, and Credit spreads.</li><li>Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably similar chart patterns.</li><li>In essence, these assets no longer offer diversification benefits; they have effectively become indistinguishable trades.</li></ul>

Throughout 2024, we’ve witnessed tight trading ranges across various markets: oil, FX, and Credit spreads.Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably similar chart patterns.In essence, these assets no longer offer diversification benefits; they have effectively become indistinguishable trades.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There were a few rebalance announcements in the last week and the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and STAR100 Index rebalances were implemented at the close on Friday.</li>
<li>There are a lot of rebalances that will be implemented at the close on the coming Thursday and Friday.</li>
<li>Another big week of inflows for onshore China ETFs with Central Huijin likely behind the big flows to ETFs tracking the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX)</a>. </li>
</ul>


There were a few rebalance announcements in the last week and the SSE STAR50 (STAR50 INDEX) and STAR100 Index rebalances were implemented at the close on Friday.
There are a lot of rebalances that will be implemented at the close on the coming Thursday and Friday.
Another big week of inflows for onshore China ETFs with Central Huijin likely behind the big flows to ETFs tracking the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX). 


Index Rebalance & ETF Flow Recap: NKY, ASX, CSI300, A50, STTF, LowVol30, Value Up

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

True Insights

Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

<ul>
<li>Bitcoin AND gold made new all-time highs, which is by no means a coincidence. Gold’s market cap is now over USD 16 trillion, which is important for two reasons.</li>
<li>The Fed has multiple reasons to cut rates even though GDP growth is resilient, including bank defaults, the commercial real estate crisis, and evaporating liquidity.</li>
<li>The ECB should cut rates, too; it runs the risk of getting in on the action too late.</li>
</ul>


Bitcoin AND gold made new all-time highs, which is by no means a coincidence. Gold’s market cap is now over USD 16 trillion, which is important for two reasons.
The Fed has multiple reasons to cut rates even though GDP growth is resilient, including bank defaults, the commercial real estate crisis, and evaporating liquidity.
The ECB should cut rates, too; it runs the risk of getting in on the action too late.


The Weekly Market Monitor – These Two All-Time Highs Are No Coincidence!

United States

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.

S&P 500 INDEX (SPX INDEX)

Rate-Cutting Agenda Stays, Growth Buoyed by Massive Fiscal Stimulus

Fiscal deficits averaged 9.95% of GDP in 2020-2023, M2 growth 18.2%YoY in Mar'20-Feb'22. Latter needs to decline faster in Q2CY24 to offset the...

Prasenjit K. Basu

Rotating EM Flows: From Japan to Emerging Asia

Welcome to the Emerging Market Series, this week covering the rotating capital flows away from Japan and its significance for China and Emerging...

Steno Research

Are We Heading for a Volatility Event?

Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably...

Untying The Gordian Knot

Index Rebalance & ETF Flow Recap: NKY, ASX, CSI300, A50, STTF, LowVol30, Value Up

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

The Weekly Market Monitor – These Two All-Time Highs Are No Coincidence!

Forget the macro data for a moment. This week was all about central banks opening the door to policy easing and scarce assets recording new all...

Jeroen Blokland

Rate-Cutting Agenda Stays, Growth Buoyed by Massive Fiscal Stimulus

​Fiscal deficits averaged 9.95% of GDP in 2020-2023, M2 growth 18.2%YoY in Mar'20-Feb'22. Latter needs to decline faster in Q2CY24 to offset the...

Prasenjit K. Basu

Rotating EM Flows: From Japan to Emerging Asia

Welcome to the Emerging Market Series, this week covering the rotating capital flows away from Japan and its significance for China and Emerging...

Steno Research

Are We Heading for a Volatility Event?

Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably...

Untying The Gordian Knot

Index Rebalance & ETF Flow Recap: NKY, ASX, CSI300, A50, STTF, LowVol30, Value Up

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

The Weekly Market Monitor – These Two All-Time Highs Are No Coincidence!

Forget the macro data for a moment. This week was all about central banks opening the door to policy easing and scarce assets recording new all...

Jeroen Blokland

Fiscal deficits averaged 9.95% of GDP in 2020-2023, M2 growth 18.2%YoY in Mar'20-Feb'22. Latter needs to decline faster in Q2CY24 to offset the...