Fund management firms loss assets
JAKARTA (JP): Many major fund management companies in Indonesia suffered substantial reductions in assets under their management due to the financial crisis, a senior official at a leading fund management company said.
Rizka Baely, director of PT Citicorp Securities Indonesia, said on Wednesday that there were massive withdrawals by mutual funds' institutional clients in the wake of the crisis.
"Institutional investors, especially banks, were pulling out in the wake of the crisis," she said at a conference on the global and regional economic outlook for 1999, organized by Citibank Global Asset Management Indonesia.
Most of the country's fledgling mutual funds are sponsored by banks.
The country's banking industry was one of the hardest hit sectors by the economic and currency crisis, causing huge non- performing loans, massive runs and a huge demand for fresh money for recapitalization.
Rizka, however, said that despite the generally poor performance of the fund management industry, Citicorp Indonesia managed to increase the assets under its management by Rp 163 billion (US$21.8 million at the current exchange rate) to Rp 300 billion in October.
That made Citicorp Indonesia the seventh largest mutual fund company in the country, up from 17th largest at the end of last year. Also, its CitiReksaDana fund became the fourth largest fixed income mutual fund in the country.
She said PT BNI Securities remained the largest fund manager in the country, with assets under its management totaling Rp 940 billion. But it suffered a considerable decline of around Rp 1 trillion in the assets it managed.
According to Rizka, other poor performers in the country's top 10 fund managers were those operated by PT Danareksa, losing Rp 687 billion in assets under its management; PT Bahana, which declined Rp 81 billion; PT Schroder, down Rp 104 billion; PT Nikko Securities, losing Rp 164 billion; PT BDNI Securities, down Rp 28 billion; and PT Bakrie Securities, which declined by Rp 314 billion.
Major gainers were PT Intru Nusantara and PT Panin Securities, she added.
Rizka said that all the data was collected from Bapepam, the country's capital market watchdog.
She said that the country offered huge potential for growth for the fund management industry, pointing out that the total market size offered by pension funds, insurance companies and social securities in 1998 was estimated at Rp 44.37 trillion.
"Only 11 percent has been tapped by the investment management industry via managed accounts and mutual funds," she said.
Citicorp Securities Indonesia has managed institutional investors' portfolios since 1994, and individual investors' portfolios through their CitiReksaDana mutual fund since July 1997.
Rizka said that the firm managed the accounts of 37 institutions, mostly pension funds of state and multinational companies in the country.
The firm is part of Citibank global asset management operation, which, together with Salomon Brothers Asset Management and Smith Barney Asset Management, merged into a huge SSBC Asset Management Group, with assets under its management reaching $296 billion -- the world's 15th largest management group. (rei)