Jakarta – DBS Group Research predicts that the rupiah exchange rate against the US dollar will strengthen in the fourth quarter of 2024, assuming the Fed cuts its benchmark interest rate in that quarter.
Equities Specialist DBS Group Research Maynard Arif revealed, the possibility of a strengthening rupiah in the fourth quarter of 2024 is expected to make the Composite Stock Price Index (CSPI) show better performance.
“We see predictions when it is still optimistic at the level of 7,700 until the end of the year. But it depends on the Fed,” he explained, on Thursday, July 4, 2024.
He said, there are several sectors that are affected by the Fed’s interest rate cut. Among others, banking, consumer cyclical, and property that have the potential to be ogled by investors.
Also, various stocks with high market value or big caps are also attractive to investors.
“We are just looking for which big caps may have corrected but have positive growth prospects this year which we think are interesting to collect,” he said.
At the same place, Head of Investment Product & Advisory of PT Bank DBS Indonesia Djoko Soelistyo recommended for his customers to invest in bonds issued by the government denominated in US dollars if the Fed’s benchmark interest rate (FFR) drops in the fourth quarter of 2024.
According to him, for now, the yield value of US dollar bonds made by the Indonesian government is quite attractive when compared to US Treasuries.
“So customers, investors, or prospective customers who may currently have US dollars but do not know where to invest, may invest in US dollar bonds,” Djoko said, as quoted by Antara.
In addition, investors can also place investments in US dollar-denominated offshore mutual funds, including offshore sharia mutual funds. (*)
