Nine more mutual funds to hit the market

JAKARTA (JP): The Capital Market Supervisory Agency (Bapepam) confirmed yesterday that by Nov. 12 it had approved the establishment of 13 mutual funds with promoters' funds reaching Rp 1.16 trillion (around US$491 million).

"There are nine other mutual funds now being prepared," Bapepam's chairman I Putu Gede Ary Suta said yesterday at the launch of Asia Securities' open-ended mutual fund, Asia Tetap Berbunga.

Putu said that nine new mutual funds were being set up by Bank Bira (three funds), BII Lend Lease (two funds) and ABN AMRO Bank (four funds).

The government has encouraged the establishment of mutual funds to increase small domestic investors' participation in both equity and money markets.

The government introduced capital market law in January, which covers open-ended mutual funds.

Before the law came into effect there was only one closed- ended mutual fund in operation, set up by PT BDNI Securities.

Unlike closed-ended mutual funds, open-ended funds have more flexibility in choosing investments. Moreover, they allow investors to redeem their shares at any time.

Asia Securities' president Johanes Susilo said his company's Asia Tetap Berbunga fund would issue up to one billion shares/notes, which would be offered to investors for Rp 1,000; a price reflecting the firm's net asset value per share at the first day of the offering on Nov. 8.

Susilo said the firm had raised Rp 12 billion from four promoters including PT Asia Kapitalindo Securities, PT Eficorp Securities, PT Bank Kesawan and PT Halim Indonesia Bank.

He said the firm would invest up to 95 percent of its total funds in money market instruments and 5 percent in bonds.

He said Asia Securities and Bank Dagang Nasional were acting as the firm's investment manager and custodian bank.

Susilo predicted that Asia Tetap Berbunga could make returns between 18 percent and 20 percent yearly. (alo)