A macro hedge fund spun out of Millennium Management LLC is building bullish positions in the Indonesian rupiah and Singapore dollar, betting that measures adopted by the two countries could boost their currencies.
The Indonesian currency may appreciate as much as 4% this year, bolstered by its drive to become a regional electric vehicle hub, said Jimmy Lim, chief investment officer of Modular Asset Management, which manages nearly US$1 billion ($1.32 billion) of assets. In other trades, the Singapore-based firm is counting on the Singapore dollar to strengthen on a faster vaccine rollout, while the Thai baht and Philippine peso will weaken.
Lim is expecting Indonesia to see a production boom in battery-grade nickel, the metal for lithium-ion batteries most likely to face supply constraints over the next five years. Indonesia is the world’s top nickel miner with nearly a quarter of the global reserves. BloombergNEF forecasts the Southeast Asian country will be able to more than triple its production capacity for high-grade nickel by 2025.