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)

IMF chief Christine Lagarde indicated after meeting Sri Lanka's finance minister Samaraweera and central bank governor Coomaraswamy that an IMF team will return to Sri Lanka in mid-February to discuss the resumption of the IMF's Extended Fund Facility (EFF) -- 3 months after it was suspended amid the political turmoil. President Sirisena's constitutional coup -- in replacing Prime Minister Wickremasinghe with his predecessor Mahinda Rajapakse, despite Wickremasinghe commanding a parliamentary majority -- was eventually overturned by the Supreme Court on 15th December 2018, and Wickremasinghe returned to office on 16th December.
But the Budget for 2019 (scheduled to be presented in late-November 2018) could not be presented on schedule while political turmoil reigned. Sri Lanka's government is operating through a temporary Vote on Account, and a new Budget is likely only in April (after consultations with the IMF). Meanwhile the economy has decelerated further, with real GDP up just 2.8% YoY in 3Q 2018, and likely to have decelerated further in 4Q 2018. With the LKR depreciating more than 20% in 2018, the central bank raised its policy rate by 75bp in November. But with inflation at just 2.8% YoY, and the LKR stable at 180-182/US$, we expect a 50bp reduction in interest rates over the next 3 months. This should provide a modest boost to 4% real GDP growth by 2-3Q 2019. 
But the spectre of political turmoil remains a significant negative factor. A presidential election is due by December 2019 (but could he held at any time before that). Any Rajapakse ally elected president will be likely to use even the diminished powers of the presidency to harass PM Wickremasinghe -- whose own parliamentary term is otherwise supposed to last until late-2020. But the political tussle between Wickremasinghe and Rajapakse will remain a key impediment to significant economic reforms, including the implementation of a coherent strategy to diversify and strength exports. We continue to recommend staying Underweight Sri Lanka in a frontier-market portfolio, where many higher-growth markets (Bangladesh and Vietnam) offer better prospects.

IMF chief Christine Lagarde indicated after meeting Sri Lanka's finance minister Samaraweera and central bank governor Coomaraswamy that an IMF team will return to Sri Lanka in mid-February to discuss the resumption of the IMF's Extended Fund Facility (EFF) -- 3 months after it was suspended amid the political turmoil. President Sirisena's constitutional coup -- in replacing Prime Minister Wickremasinghe with his predecessor Mahinda Rajapakse, despite Wickremasinghe commanding a parliamentary majority -- was eventually overturned by the Supreme Court on 15th December 2018, and Wickremasinghe returned to office on 16th December.
But the Budget for 2019 (scheduled to be presented in late-November 2018) could not be presented on schedule while political turmoil reigned. Sri Lanka's government is operating through a temporary Vote on Account, and a new Budget is likely only in April (after consultations with the IMF). Meanwhile the economy has decelerated further, with real GDP up just 2.8% YoY in 3Q 2018, and likely to have decelerated further in 4Q 2018. With the LKR depreciating more than 20% in 2018, the central bank raised its policy rate by 75bp in November. But with inflation at just 2.8% YoY, and the LKR stable at 180-182/US$, we expect a 50bp reduction in interest rates over the next 3 months. This should provide a modest boost to 4% real GDP growth by 2-3Q 2019. 
But the spectre of political turmoil remains a significant negative factor. A presidential election is due by December 2019 (but could he held at any time before that). Any Rajapakse ally elected president will be likely to use even the diminished powers of the presidency to harass PM Wickremasinghe -- whose own parliamentary term is otherwise supposed to last until late-2020. But the political tussle between Wickremasinghe and Rajapakse will remain a key impediment to significant economic reforms, including the implementation of a coherent strategy to diversify and strength exports. We continue to recommend staying Underweight Sri Lanka in a frontier-market portfolio, where many higher-growth markets (Bangladesh and Vietnam) offer better prospects. 

Staying with the IMF Program Entails Sluggish Growth, and the Uncertain Promise of Future Gains

Differentiated global TMT & Internet Research

New Street Research Insights

New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
Japan Telecoms
Asian Internet
Pan European Healthcare
US Healthcare
Japanese Healthcare

We also provide debt research on:
Pan European Telecom Services and Cable

Returns in emerging market wireless telecoms have bottomed as the sector takes a capex holiday after the 4G roll-out. We continue to like low-return markets where we look for returns to rise (e.g. India, Indonesia, China are prime examples). We have also become more bullish where returns are high and stable (e.g. Hong Kong). A number of markets continue to face tough conditions typically due to rising spectrum payments (e.g. Malaysia and Thailand).Higher returns imply higher cash flows and that is good news for both debt reduction and rising dividends. it also may encourage more M&amp;A, an area we think makes sense for in market consolidation and fixed/wireless convergence.In terms of stocks, we favor names such as <a href="https://www.smartkarma.com/entities/953" target="_blank" data-smartkarma-citation="entities:953:1">Bharti Airtel (BHARTI IN)</a> , <a href="https://www.smartkarma.com/entities/1016" target="_blank" data-smartkarma-citation="entities:1016:1">China Unicom (762 HK)</a>, Telefonica Brasil, <a href="https://www.smartkarma.com/entities/15028" target="_blank" data-smartkarma-citation="entities:15028:1">XL Axiata (EXCL IJ)</a> and <a href="https://www.smartkarma.com/entities/873" target="_blank" data-smartkarma-citation="entities:873:1">PCCW (8 HK)</a>. Top shorts include <a href="https://www.smartkarma.com/entities/946" target="_blank" data-smartkarma-citation="entities:946:1">Maxis (MAXIS MK)</a> and <a href="https://www.smartkarma.com/entities/947" target="_blank" data-smartkarma-citation="entities:947:1">AIS (ADVANC TB)</a> .

Returns in emerging market wireless telecoms have bottomed as the sector takes a capex holiday after the 4G roll-out. We continue to like low-return markets where we look for returns to rise (e.g. India, Indonesia, China are prime examples). We have also become more bullish where returns are high and stable (e.g. Hong Kong). A number of markets continue to face tough conditions typically due to rising spectrum payments (e.g. Malaysia and Thailand).Higher returns imply higher cash flows and that is good news for both debt reduction and rising dividends. it also may encourage more M&amp;A, an area we think makes sense for in market consolidation and fixed/wireless convergence.In terms of stocks, we favor names such as Bharti Airtel (BHARTI IN) , China Unicom (762 HK), Telefonica Brasil, XL Axiata (EXCL IJ) and PCCW (8 HK). Top shorts include Maxis (MAXIS MK) and AIS (ADVANC TB) .

Emerging Market Telecoms: Returns Have Bottomed. Outlook Improves.

Sri Lanka

Sri Lanka Telecom PLC operates a telecommunications company, which specializes within the South 
Asian region. The Group provides domestic and international telephone coverage, voice mail, fax and 
telex messages, Internet  and e-mail services, and an expanding cellular network.

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Sri Lanka Telecom (SLTL SL)

Staying with the IMF Program Entails Sluggish Growth, and the Uncertain Promise of Future Gains

IMF chief Christine Lagarde indicated after meeting Sri Lanka's finance minister Samaraweera and central bank governor Coomaraswamy that an IMF...

Prasenjit K. Basu

Emerging Market Telecoms: Returns Have Bottomed. Outlook Improves.

Returns in emerging market wireless telecoms have bottomed as the sector takes a capex holiday after the 4G roll-out. We continue to like...

New Street Research

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