Nine more mutual funds to hit the market

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)