The Composite Stock Price Index (IHSG) is predicted to touch the level of 7,585 by the end of 2024. This is in line with the adjustment of the benchmark interest rate by business actors and issuers.
Head of Research & Chief Economist Mirae Asset Rully Arya Wisnubroto said that the IHSG projection was based on considerations that the current macroeconomics related to the more limited room for interest rate cuts by Bank Indonesia (BI) and the position of the rupiah exchange rate. “With this prediction, our research team has nine top picks, namely ACES, ASII, BBRI, BBCA, BMRI, CPIN, MAPI, MYOR, and TLKM,” said Rully in Jakarta, Wednesday (3/7).
The adjustment of top picks was done by including BMRI and TLKM to replace ANTM and HRUM. “This needs to be done amidst quite high market volatility, so it is necessary to be more selective in selecting stocks with large market capitalization and strong fundamentals,” said Rully.
Volatility is indicated by the outflow of foreign capital from the capital market (foreign net sell) worth US$2.8 billion. The details are around US$2.7 billion in the form of government bonds and US$600 million in the form of stocks and other equity securities since the beginning of the year until June 24, 2024.
Regarding macroeconomics, Rully is optimistic that Indonesia’s condition will be positive and predicts that the room for BI’s benchmark interest rate reduction will still be influenced by the increasingly stable rupiah exchange rate and the potential for a decrease in the US benchmark interest rate or Fed Fund Rate (FFR). Amidst various challenges, he projects that banking credit growth will be in line with BI’s growth target of 10% to 12%.
According to him, the BI policy currently taken serves to support stability. He estimates that this will last longer with the influence of the increasingly controlled rupiah volatility.
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“Therefore, we predict Indonesia’s GDP growth to be 5.01% in 2024 and 5.02% in 2025, due to a less aggressive interest rate cut policy than previously estimated,” Rully said. The global economy in the second half of 2024 is predicted to be supported by the US and India as growth engines until next year.
For the US, he believes that its economic growth will tend to be moderate, driven by the slow impact of very aggressive monetary policy tightening since 2022. As another factor, he believes that uncertainty is still very high and it is difficult to predict the continuation of geopolitical tensions between Iran and Israel.
Geopolitical tensions in other regions, he added, could drive short-term volatility. But global demand figures remain weak, especially due to weak Chinese economic growth. (Ant/Z-2)
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