Jamsostek to pour Rp 8t into stock market

The Jakarta Post, Jakarta | Wed, 01/21/2009 1:10 PM  

State occupational insurance company PT Jamsostek will still spend large for buying stocks this year although cutting allocation. 

The company, the country’s largest institutional investor in the capital market, is allocating around 11 percent of this year’s investable funds worth Rp 72.7 trillion (US$6.49 billion) on buying stocks in the market. 

This amount equals to around Rp 8 trillion, raising hopes of revival in the sluggish investment in the bourse. 

“We plan to invest around 11 percent of our investable funds in the stock market. The allocation is lower than last year’s 20 percent,” said Jamsostek president director Hotbonar Sinaga at the State Ministry of State Enterprises Tuesday. 

Last year, Jamsostek had investable funds of Rp 59.5 trillion. 

He said 30 percent of this year’s investable funds would be placed in bank deposits, while the remaining 59 percent would be placed in mutual funds, direct equity investments and property. 

At the end of 2008, deposits made up over 30 percent of company assets, while bonds were over 50 percent and equities and direct investments accounted for only 20 percent. 

As earlier reported, the major fall in the capital market during 2008 took a toll on the value of Jamsostek investments in stocks, with the company only making around 85 percent of its targeted Rp 1.17 trillion in net profits. 

The company, whose equity and bond investments always become a benchmark for other institutional and retail investors, is looking at net profits to increase by 10 percent this year to Rp 1.27 trillion. 

According to Hotbonar, investment revenue is expected to grow by 25 percent to Rp 2.8 trillion while assets are forecast to jump by 22 percent to Rp 75 trillion. 

Premiums paid by workers are estimated to grow by 17 percent to Rp 11.46 trillion, while membership targets will be set at 2.5 million workers up from 2.3 million last year. 

Jamsostek collects regular premiums from workers in the form of savings until retirement, and covers payments for events such as accidents, dismissals, layoffs and illness as well as retirement pensions. 

In October last year, Indonesia’s stock market did not escape the global financial turmoil, with its share price index tumbling by almost 50 percent. 

Hotbonar admitted in December the company had invested too much on the stock market, causing a substantial decline in its financial growth and a decrease in its stock portfolio value of Rp 4 trillion. 

Among the shares owned by the company at that time were those of PT Astra International, PT Astra Agro Lestari, Bank Central Asia, PT United Tractors and PT Unilever. 

Investors often trail Jamsostek stock shopping decisions in the hope of making gains from rising share prices of stocks targeted by the company, which regularly spreads its buying orders across several major securities houses to avoid being detected by other investors. 

Jamsostek is also a main buyer of shares offered by state companies during their initial public offerings. 

Daily stock transaction at the Indonesia Stock Exchange is valued at an average of Rp 1 trillion to Rp 2 trillion.

The Jakarta Composite index dropped Teusday to 1344.15 from Monday's 1350.69 due to negative sentiment from the gloomier US financial market. Indonesian stock investors are still felling the pinch of the global stock market rout.