DBS Group Research has released projections indicating that the first quarter of 2024 will provide a conducive environment for investments in risky assets such as stocks and corporate bonds.
This forecast is rooted in the expectation that the benchmark interest rates in the United States will reach their peak, aligning with a deceleration in inflation and a delay in the tightening of the US Federal Reserve’s monetary policy.
DBS Chief Investment Officer (CIO) Hou Wey Fook and Equities Specialist Maynard Arif foresee positive economic growth in Indonesia and globally for the first quarter of 2024.
These projections are based on identified growth opportunities in the technology industry, secondary needs, and the luxury goods sector.
Hou Wey Fook advised investors to focus on positive growth in the technology sector and secondary needs in stock investments.
Additionally, for debt securities and bonds, the optimal position is identified in A or BBB-rated bonds with a maturity period of three to five years. However, investors are urged to exercise caution against credit risks that may accumulate even after interest rate hikes.
The United States Federal Reserve initiated a tightening policy with a total interest rate hike of 525 basis points over 16 months, marking the fastest and most aggressive interest rate hike cycle in history.
Hou Wey Fook acknowledged that this condition posed challenges for equity and bond markets over the past year.
Industry experts have also highlighted the growth of the luxury goods industry, recording a compound annual growth rate of 6 percent between 1996 and 2019. This growth was propelled by globalization and the purchasing power of Generation Z.
“DBS CIO views this industry as having strong appeal and significant investment potential,” said Hou Wey Fook.
As investors navigate evolving market conditions, these positive projections provide insights into potential growth opportunities and risk management strategies.
