Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

PK Basu has 35 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 and Asia sector strategist 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

Malaysia: Imminent Political Realignments Raise Uncertainty over Electoral Outcomes

Malaysia: Local and Foreign Investors Are Fleeing Despite the Commodity Boom

Malaysia: PH Is Stronger in West Malaysia, but Sabah-Sarawak May Hold Final Cards

Malaysia: Stability Paves Way for Better Policy; UMNO-PAS Long-Term Challenge

Malaysia’s Budget 2022: Longer-Term Challenges Remain Unaddressed

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

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

Malaysia's investment/GDP ratio stagnated at 25.5% in 2012-17, then fell to 21% in 2019 and 19.7% in 2020, with public investment falling below 5% of GDP. Any reversal of this in 2022 remains unlikely with the one-off "prosperity tax" leading corporates and banks to bring forward expenses, hike provisions, and delay income-recognition in order to lower their taxable income. With corporate and bank earnings likely to be anaemic in 2022, we recommend staying Underweight Malaysia. 
A second consecutive expansionary Budget (with deficits above 6% of GDP) barely hid the reality of a steadily declining public investment/GDP ratio since 2012; the rebound in private investment is led by GLCs, while the steady erosion of non-bumiputra companies in Malaysia is reflected in steadily-rising net capital outflows and in declining private non-GLC investment in Malaysia. Despite consistent current account surpluses since 1998, Malaysia's foreign reserves (US$115.4 billion in September 2021) are much lower than they were in 2012 (over US$160 billion). 
No discernible strategy has emerged from the current government to reverse these trends; the one-off tax is instead a further negative for corporates and banks, and UMNO-PAS are doubling down on anti-minority regulations as a means of securing the bumiputera vote at the next election. We are structurally bearish on Malaysia until the next election is held.

Malaysia's investment/GDP ratio stagnated at 25.5% in 2012-17, then fell to 21% in 2019 and 19.7% in 2020, with public investment falling below 5% of GDP. Any reversal of this in 2022 remains unlikely with the one-off "prosperity tax" leading corporates and banks to bring forward expenses, hike provisions, and delay income-recognition in order to lower their taxable income. With corporate and bank earnings likely to be anaemic in 2022, we recommend staying Underweight Malaysia. 
A second consecutive expansionary Budget (with deficits above 6% of GDP) barely hid the reality of a steadily declining public investment/GDP ratio since 2012; the rebound in private investment is led by GLCs, while the steady erosion of non-bumiputra companies in Malaysia is reflected in steadily-rising net capital outflows and in declining private non-GLC investment in Malaysia. Despite consistent current account surpluses since 1998, Malaysia's foreign reserves (US$115.4 billion in September 2021) are much lower than they were in 2012 (over US$160 billion). 
No discernible strategy has emerged from the current government to reverse these trends; the one-off tax is instead a further negative for corporates and banks, and UMNO-PAS are doubling down on anti-minority regulations as a means of securing the bumiputera vote at the next election. We are structurally bearish on Malaysia until the next election is held. 

Kuala Lumpur Composite Index (KLCI) (FBMKLCI INDEX)

Malaysia: In a Middle-Income Trap of Low Growth Despite Sustained Fiscal Deficits