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>Real GDP grew 8.7% in 2025, after a surge to 12.7%YoY growth in Q4'25. Soaring AI- and cloud-computing demand for semiconductors caused the trade surplus to nearly double in 2025. </li>
<li>Inflation moderated to a 5-year low of 0.67%YoY in Jan'26; the US trade deal will keep inflation tame. We expect 12.5bp rate cuts at both June and September CBC meetings. </li>
<li>We expect 11% real GDP growth in H1'26 and 9% growth for 2026. Stay OVERWEIGHT Taiwan, particularly its world-leading technology sector. </li>
</ul>


Real GDP grew 8.7% in 2025, after a surge to 12.7%YoY growth in Q4'25. Soaring AI- and cloud-computing demand for semiconductors caused the trade surplus to nearly double in 2025. 
Inflation moderated to a 5-year low of 0.67%YoY in Jan'26; the US trade deal will keep inflation tame. We expect 12.5bp rate cuts at both June and September CBC meetings. 
We expect 11% real GDP growth in H1'26 and 9% growth for 2026. Stay OVERWEIGHT Taiwan, particularly its world-leading technology sector. 


Taiwan: Global Growth Leader Is the Genuine Goldilocks Economy

<ul>
<li>SCOTUS invalidated Trump's use of IEEPA to impose tariffs on various countries (and importers can hence demand refunds). Pres. Trump reimposed a 15% tariff on all imports for 150 days.  </li>
<li>In 2025, there was a large decline in US bilateral deficits with China and modest ones with most OECD partners, but big increases in deficits with Mexico, Taiwan, Vietnam, Ireland.</li>
<li>In 2026, the US bilateral deficits are likely to increase faster given the lower tariff, with only modest increases in US goods exports via deals. Good for global trade. </li>
</ul>


SCOTUS invalidated Trump's use of IEEPA to impose tariffs on various countries (and importers can hence demand refunds). Pres. Trump reimposed a 15% tariff on all imports for 150 days.  
In 2025, there was a large decline in US bilateral deficits with China and modest ones with most OECD partners, but big increases in deficits with Mexico, Taiwan, Vietnam, Ireland.
In 2026, the US bilateral deficits are likely to increase faster given the lower tariff, with only modest increases in US goods exports via deals. Good for global trade. 


US: SCOTUS Upends Trump's Tariff Framework; Good for Global Trade

Cross Asset Strategy

<ul>
<li>Today's election is likely to result in a narrow win for the DPP's Lai Ching-te, but with a hung legislature, requiring the DPP to form a coalition with Ko's TPP. </li>
<li>This outcome would be positive for markets, as it would circumscribe Lai's ability to openly advocate independence. Unlike Chen (2000-08), he would not be hemmed in by the KMT ascendant. </li>
<li>If the KMT's Hou (also native Taiwanese) wins, he would face not only a hung parliament, but also dissension within the party. After initial euphoria, this would be market-negative.</li>
</ul>


Today's election is likely to result in a narrow win for the DPP's Lai Ching-te, but with a hung legislature, requiring the DPP to form a coalition with Ko's TPP. 
This outcome would be positive for markets, as it would circumscribe Lai's ability to openly advocate independence. Unlike Chen (2000-08), he would not be hemmed in by the KMT ascendant. 
If the KMT's Hou (also native Taiwanese) wins, he would face not only a hung parliament, but also dissension within the party. After initial euphoria, this would be market-negative.


Taiwan: Election Likely to Deliver a Hung Legislature, Constraining DPP's Autonomy

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

Index Rebalance

<ul>
<li>There used to be a 30% single stock capping rule for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a>. Following a hue and cry, that was repealed in 2020.</li>
<li>With <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics</a> and <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix</a> making up over 60% of the index weight, it may be time for the index provider and regulators to revisit capping, and at a lower level.</li>
<li>The <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX)</a> shows concentration on every metric compared to other regional equity indices. That does not bode well in times of market volatility.</li>
</ul>


There used to be a 30% single stock capping rule for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX). Following a hue and cry, that was repealed in 2020.
With Samsung Electronics and SK Hynix making up over 60% of the index weight, it may be time for the index provider and regulators to revisit capping, and at a lower level.
The Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) shows concentration on every metric compared to other regional equity indices. That does not bode well in times of market volatility.


KOSPI200 Index: Should Capping Be (Re)Introduced?

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Taiwan Stock Exchange Weighted Index / Technical Analysis

Taiwan Stock Exchange Weighted Index (TWSE INDEX)

<ul>
<li>Rallies appear to be stalling-out near logical resistances in the largest global equity markets. That includes 5670-5783 on SPX, 2690-2700 on Japan's TOPIX, and 4884 on Europe's EURO STOXX 50.</li>
<li>We continue to believe these indexes will roll over near current or marginally higher levels, fitting with our ongoing belief that MSCI ACWI is going through a 1-to-4-month pullback/consolidation.</li>
<li>Long-Term uptrend violations on global indexes and continued outperformance from defensive Sectors are our top concerns for global equities, though recession indicators and a Fed cutting cycle are also concerns.</li>
</ul>


Rallies appear to be stalling-out near logical resistances in the largest global equity markets. That includes 5670-5783 on SPX, 2690-2700 on Japan's TOPIX, and 4884 on Europe's EURO STOXX 50.
We continue to believe these indexes will roll over near current or marginally higher levels, fitting with our ongoing belief that MSCI ACWI is going through a 1-to-4-month pullback/consolidation.
Long-Term uptrend violations on global indexes and continued outperformance from defensive Sectors are our top concerns for global equities, though recession indicators and a Fed cutting cycle are also concerns.


Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

Taiwan

The MSCI Taiwan Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31 1987.

MSCI Taiwan Index (TAMSCI INDEX)

Taiwan: Global Growth Leader Is the Genuine Goldilocks Economy

RGDP growth surged 8.7% in 2025 as soaring chip demand enabled a near-doubling of the trade surplus. With RGDP growing 9%, inflation at 1% (with...

Prasenjit K. Basu

US: SCOTUS Upends Trump's Tariff Framework; Good for Global Trade

SCOTUS invalidated Trump's tariffs. US deficits declined with China, increased with Mexico, Taiwan, Vietnam, Ireland. Lower tariffs in 2026 will...

Prasenjit K. Basu

Taiwan: Election Likely to Deliver a Hung Legislature, Constraining DPP's Autonomy

Likely outcome of Lai as president, but with a hung legislature requiring a DPP-TPP coalition would be good for markets. China would be hostile,...

Prasenjit K. Basu

KOSPI200 Index: Should Capping Be (Re)Introduced?

The KOSPI200 is more concentrated than the KOSDAQ150 and other regional peers. Sidecars and circuit breakers are being triggered more frequently...

Brian Freitas

Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

Expecting Downside Ahead $ACWI $SPX; Stick With Defensive Sectors; Downgrading Taiwan $EWT $TSM to Market Weight; Global Discretionary vs. Staples...

Vermilion Research

Taiwan: Global Growth Leader Is the Genuine Goldilocks Economy

​RGDP growth surged 8.7% in 2025 as soaring chip demand enabled a near-doubling of the trade surplus. With RGDP growing 9%, inflation at 1% (with...

Prasenjit K. Basu

US: SCOTUS Upends Trump's Tariff Framework; Good for Global Trade

​SCOTUS invalidated Trump's tariffs. US deficits declined with China, increased with Mexico, Taiwan, Vietnam, Ireland. Lower tariffs in 2026 will...

Prasenjit K. Basu

Taiwan: Election Likely to Deliver a Hung Legislature, Constraining DPP's Autonomy

Likely outcome of Lai as president, but with a hung legislature requiring a DPP-TPP coalition would be good for markets. China would be hostile,...

Prasenjit K. Basu

KOSPI200 Index: Should Capping Be (Re)Introduced?

The KOSPI200 is more concentrated than the KOSDAQ150 and other regional peers. Sidecars and circuit breakers are being triggered more frequently...

Brian Freitas

Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs

Expecting Downside Ahead $ACWI $SPX; Stick With Defensive Sectors; Downgrading Taiwan $EWT $TSM to Market Weight; Global Discretionary vs. Staples...

Vermilion Research

RGDP growth surged 8.7% in 2025 as soaring chip demand enabled a near-doubling of the trade surplus. With RGDP growing 9%, inflation at 1% (with...

SCOTUS invalidated Trump's tariffs. US deficits declined with China, increased with Mexico, Taiwan, Vietnam, Ireland. Lower tariffs in 2026 will...