Jamsostek to invest more in stock
Rendi A. Witular, The Jakarta Post, Jakarta
Hoping to take advantage of the booming stock market amid rising confidence among foreign investors, state-owned social security firm PT Jamsostek is planning to increase its investments in the local bourse.
Jamsostek's newly appointed president director, Iwan Pontjowinoto, told The Jakarta Post recently that the company would increase its investment in stocks to at least 15 percent of its total investment portfolio this year as it believed the bourse would rise even further.
"The fundamentals of our bourse are strong. Yields from investments in stocks are higher than any other investment portfolio. However, we realize that the risks are also greater. Therefore, we are not going to invest speculatively," said Iwan.
The company's total investments this year were expected to increase to Rp 40 trillion, he added.
In 2004, Jamsostek invested Rp 14.1 trillion in bonds, Rp 14.37 trillion in bank deposits and Rp 3.44 trillion in stocks, mutual funds and other securities.
With such a huge amount of funds under its management, Jamsostek is the only local institutional investor that is capable of acting as a key mover of the stock market, with most other movers being foreign based investment banks and securities houses.
In fact, due in part to the massive amount of funds at its disposal, Jamsostek has often suspected of helping jack up the price of shares in state firms before they were sold through initial public offerings or secondary offerings.
Suspicions are also rife that Jamsostek has been acting as a buffer for the government by engaging in aggressive buying to keep the stock market index from falling whenever serious negative sentiment sets in.
Responding to the accusations, Iwan said that he was not aware of such practices, and gave assurances that he would not encourage any form of investment that was not in line with making profits on behalf of those insured by the company.
"Our investments will not be used for practices that could cause losses to our investable funds. Our funds will only be invested in safe portfolios over the long term," he stressed.
Iwan said that he would soon revise the makeup of the company's investment strategy in order to gain maximum profits, with most of the funds likely to be invested in bonds issued by the government and private sector.
"I cannot elaborate as yet on the new composition of our portfolio, but the greater part will certainly be in the form of bonds," said Iwan, who is an expert on information technology.
The company has said it plans to buy more government bonds this year to help plug the state budget deficit.