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)