Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

PK Basu has 34 years experience covering Asia's economies and markets (equities, fixed income and currencies), including 20 years covering the global economy. He was Chief Economist (SE Asia & India) at Credit Suisse First Boston for 5 years, and Chief Asia (x-Jpn) Economist at Daiwa Securities for a similar period. Among other roles, he was global head of research at Maybank Kim Eng, Malaysia equity research head and chief ASEAN economist at Macquarie, Chief Economist at ICICI Securities, ASEAN economist at UBS and the first chief economist at Khazanah Nasional (where he was co-head of research, and led all agri-business initiatives). PK Basu started his career in the Asia Service of WEFA (Wharton Econometrics) in Philadelphia in 1990, rising to be Director of their Asia Service in June 1994. 
PK's book, "Asia Reborn: A continent rises from the ravages of Colonialism and War to a New Dynamism" won the Tata Literature First Book Award (non-fiction) for 2018. It is the first single chronicle of the modern economic and political history of the whole of Asia (from Iraq and Turkey to Korea and Japan, and everything in between), told from an Asian perspective.

Chief Economist & Political Strategist

Election Cliffhanger Brings Near-Term Nightmare; but a Curtailed Left Helps Biden

US Economy Robust Despite Surging Covid Toll; Biden Cabinet Looks China-Positive

2021 to Mark the Return of Inflation: Fed Hike by Mid-Year Implies Risk-Off by 2Q/21

Labour Market Slack Remains but FOMC Will Need to Tighten by Mid-2021

Ugly, Disorderly Debate Raises the Spectre of 1824, if Not 1860

The Trade War Is Set to Worsen, as China Falls Far Short of Meeting Phase 1 Targets

Trump's "Law & Order" Message Tightens the Polls, but Biden-Harris Still Well Ahead

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

A Deep (big) Blue Wave will be bad for markets, empowering the Democratic left which will pursue an inflationary strategy that hurts equities. Despite Biden's seemingly widening lead in the polls, the likeliest outcome is a narrow presidential win and a Light Blue Wave, which obliges the Democratic Congress to hew to the centre (Biden's preference). After an initial sell-off amid uncertainty in November, a Light Blue Wave will be good for equities, bad for bonds as the yield curve steepens and growth prospects improve into 2021.  President Trump's Covid-positive diagnosis, and his subsequent behaviour in and upon leaving the Walter Reed military hospital, did not help his poll numbers. Instead, the undecided or swing voters have begun tilting toward Biden, raising the increased possibility of a "blue wave", with the Democrats winning the Presidency, Senate and the House, hence ending divided government. Biden's current national lead is 9.4 percentage points (3.6pp ahead of where Hillary Clinton was at this stage in 2016), and Biden leads in all the swing states (albeit narrowly in Ohio and Florida). Last week's rival townhalls also saw slightly higher viewership for the sedate and wonkish Biden than the always-colourful Trump. The bigger the Blue Wave, however, the worse for markets. A big Blue Wave will hand the initiative to the left of the Democratic Party, enabling more of the Green New Deal to be enacted, and for legislators to push for aspects of the Medicare for All proposals. And the Democrats would also seek to "pack the Supreme Court" (i.e., expand it beyond 9 members). Despite Biden's promised tax increases, such an agenda will be severely negative for markets and the economy -- likely resulting in a big Republican backlash in the 2022 mid-term Congressional election. The greater the Blue Wave, the more negative we would be about the outcome for markets (especially equities). However, the likelier outcome is a soft Blue Wave, i.e., with the Democrats winning no more than 51 seats in the Senate, and a narrow victory for Biden in the Electoral College. If that is the outcome, November will be a month of uncertainty and chaos, with a substantial sell-off in markets. But thereafter, once the electoral outcomes are clear, the narrow Senate majority (with the Class of 2020 dominated by moderate/centrist Democrats) will curtail any thoughts of a radical leftward shift. It would instead provide the ideal ground for a President Biden to govern from the centre -- in keeping with his natural instinct. Taxes on corporates and the top 1% of personal-income earners will rise sharply, but the moderate agenda will see enhanced spending on infrastructure, subsidies for green-technology, and a mild expansion/reform of Obamacare. While the program will be moderately inflationary (resulting in Fed Funds rates rising by mid-2021), it will be good for the economy and equities after the November sell-off. On a 3-6 month view, we would recommend switching from bonds to equities by the end of November.

A Deep (big) Blue Wave will be bad for markets, empowering the Democratic left which will pursue an inflationary strategy that hurts equities. Despite Biden's seemingly widening lead in the polls, the likeliest outcome is a narrow presidential win and a Light Blue Wave, which obliges the Democratic Congress to hew to the centre (Biden's preference). After an initial sell-off amid uncertainty in November, a Light Blue Wave will be good for equities, bad for bonds as the yield curve steepens and growth prospects improve into 2021.  President Trump's Covid-positive diagnosis, and his subsequent behaviour in and upon leaving the Walter Reed military hospital, did not help his poll numbers. Instead, the undecided or swing voters have begun tilting toward Biden, raising the increased possibility of a "blue wave", with the Democrats winning the Presidency, Senate and the House, hence ending divided government. Biden's current national lead is 9.4 percentage points (3.6pp ahead of where Hillary Clinton was at this stage in 2016), and Biden leads in all the swing states (albeit narrowly in Ohio and Florida). Last week's rival townhalls also saw slightly higher viewership for the sedate and wonkish Biden than the always-colourful Trump. The bigger the Blue Wave, however, the worse for markets. A big Blue Wave will hand the initiative to the left of the Democratic Party, enabling more of the Green New Deal to be enacted, and for legislators to push for aspects of the Medicare for All proposals. And the Democrats would also seek to "pack the Supreme Court" (i.e., expand it beyond 9 members). Despite Biden's promised tax increases, such an agenda will be severely negative for markets and the economy -- likely resulting in a big Republican backlash in the 2022 mid-term Congressional election. The greater the Blue Wave, the more negative we would be about the outcome for markets (especially equities). However, the likelier outcome is a soft Blue Wave, i.e., with the Democrats winning no more than 51 seats in the Senate, and a narrow victory for Biden in the Electoral College. If that is the outcome, November will be a month of uncertainty and chaos, with a substantial sell-off in markets. But thereafter, once the electoral outcomes are clear, the narrow Senate majority (with the Class of 2020 dominated by moderate/centrist Democrats) will curtail any thoughts of a radical leftward shift. It would instead provide the ideal ground for a President Biden to govern from the centre -- in keeping with his natural instinct. Taxes on corporates and the top 1% of personal-income earners will rise sharply, but the moderate agenda will see enhanced spending on infrastructure, subsidies for green-technology, and a mild expansion/reform of Obamacare. While the program will be moderately inflationary (resulting in Fed Funds rates rising by mid-2021), it will be good for the economy and equities after the November sell-off. On a 3-6 month view, we would recommend switching from bonds to equities by the end of November. 

Dow Jones Industrial Average (INDU INDEX)

A "Blue Wave" Is Better than the Worst Outcome, but Won't Be Great for Markets