BDNI launches country's first mutual fund

BDNI launches country's first mutual fund

JAKARTA (JP): The publicly-listed Bank Dagang Nasional
Indonesia (BDNI) yesterday launched the country's first locally
managed and listed closed-end mutual fund, PT BDNI Reksadana,
with an initial capital of Rp 300 billion (US$134 million).

The fund's president director, Kamardy Arief, told a press
conference after a presentation at the Borobudur Inter-
Continental Hotel that the fund would be managed by PT BDNI
Securities.

"The fund is designed to meet the needs of a wide range of
investors," Arief said. "It is particularly suitable for
investors wishing to participate in stock markets but who lack
the time or resources to handle the paperwork, analyze
opportunities, monitor exposures or manage trading."

He added that looking at the prospect of Indonesia's stock
market, his company would offer attractive long term capital
gains.

Subject to completion of the registration process with the
Stock Market Supervisory Agency, the fund will issue 600 million
shares with a par value of Rp 500 each in an initial public
offering scheduled for September, with BDNI Securities as the
lead underwriter.

BDNI and its affiliated companies, acting as the promoters of
the fund, will provide Rp 100 billion of the initial capital by
purchasing 200 million shares of BDNI Reksadana.

BDNI Reksadana's shares, which will be listed on the Jakarta
and Surabaya stock exchanges in October, will be traded in lots
of 500.

Investment

Tetty Gozali, a director of the mutual fund, said the fund
would selectively invest the proceeds generated from the public
offering in diversified portfolios of Indonesian shares, bonds
and other listed securities as well as money market instruments.

"As required by the government's regulations, we are limited
to investing a maximum of 85 percent of our total capital in
equity," Tetty said.

Arief said BDNI Reksadana will publish audited financial
statements once a year and will report its net asset value at
least once a week. "Upon request, BDNI Reksadana will make
available more detailed statements."

Currently Indonesia recognizes only closed-end mutual funds,
which offer only a fixed number of shares to the public. The
funds do not issue additional shares and do not redeem their own
shares from the public.

However, a bill on stock markets, which is currently being
deliberated in the House of Representatives, may open the
possibility of establishing open-end mutual funds, which will
always stand ready to redeem their own shares from the public and
issue new shares to incoming investors.

"When the regulations allow the establishment of open-end
mutual funds, we may change this closed-end fund into an open-end
fund," said Simon Halim, another BDNI Reksadana director.
"However, everything is subject to shareholder approval." (rid)