Jamsostek won't cut investment in stocks

Jamsostek won't cut investment in stocks

Rendi A. Witular, Jakarta

Despite huge losses in the country's stock market lately due
to the unfavorable global economic environment, state-owned
social security firm PT Jamsostek has said that it will not
reduce its current allocation of investment in the stock market.

Jamsostek investment director Samuel Tobing said on Wednesday
the company would not revise its investment allocation for the
stock market this year at around 8 percent of the company's
investible funds on optimism that the bourse would eventually
pick up.

"There is a negative sentiment right now in the market, but I
believe it is just temporary because the fundamentals of our
bourse remain strong," said Samuel after a hearing with House of
Representatives Commission VII for social affairs.

With an 8 percent allocation, Jamsostek investment in the
stock market is estimated to reach about Rp 2.1 trillion (US$223
million) this year, compared to the company's investible funds
currently reaching in total of Rp 27 trillion.

With such a huge amount of funds, Jamsostek is the only local
institutional investor able to move the Jakarta Stock Market.

The stock market has lost more than 11 percent in the last
couple of months due to various negative issues globally and
domestically, such as the U.S. rate-hike plan, China's policy to
slow the pace of its overheating economy and concerns over
security conditions at home ahead of the July 5 presidential
election.

The Jakarta Composite Index closed unchanged on Wednesday at
707.887 on volume of 1.20 billion shares worth Rp 919.14 billion.

But Samuel said that Jamsostek was reducing the amount of
money it put in bank time deposits due to falling interest rates.
At the start of the year, some 51 percent of its funds were
invested in time deposits, which has declined to around 42
percent and is expected to decrease further to 40 percent at the
end of the year.

Jamsostek has instead increased the share of its investible
funds in bonds, both government and corporate, to 43 percent this
year from around 35 percent at the end of last year due to higher
yields of between 10 percent and 12 percent.

Jamsostek invests its remaining 7 percent of investible funds
in the property and real sector.