Social insurance firms' investments total Rp 7.89t

JAKARTA (JP): The country's five state-owned social insurance companies' investments totaled Rp 7.89 trillion (US$3.34 billion) in December last year, up 18 percent from Rp 6.67 trillion in December 1995, a Ministry of Finance official said yesterday.

Director General for State Enterprises Bacelius Ruru said that nearly 50 percent of the total was invested in bank deposits.

"Only 12 percent of the total was invested in equities," he said, adding that another 8.2 percent was invested in bonds.

Ruru said the remaining 36.6 percent was invested in commercial papers, mainly Bank Indonesia Certificates.

The five social insurance companies are Asabri, Askes, Jasa Rahardja, Jamsostek and Taspen.

Speaking on pension funds' investment portfolios at a seminar, Ruru said the composition of the five insurance companies' investments barely changed last year.

Of their total investments of Rp 6.67 trillion in 1995, 46.2 percent or Rp 3.9 trillion was invested in time deposits; 12.7 percent or Rp 845 billion was invested in equities; 7.5 percent or Rp 501 billion was invested in bonds; and 43.9 percent or Rp 2.9 trillion was invested in other instruments.

"Most of the funds were concentrated in time deposits," he said.

He urged the five insurance companies, which are grouped in the Association of Indonesian Social Insurance, to diversify their investments from time deposits to other instruments such as stocks and bonds.

"The insurance companies have not yet fully benefited from the capital market's potential," he told the seminar.

Speakers also included the Jakarta Stock Exchange's president, Cyrill D. Noerhadi, the dean of the Economics Faculty at Mercu Buana University, Didiek J. Rachbini and Panangian Simanungkalit and Associates' president, Panangian Simanungkalit.

In his speech Ruru acknowledged that returns on investment in the capital market were lower than those for time deposits.

Sentanoe Kertonegoro, the association's secretary-general shared the same view, saying that pension funds and insurance companies preferred to invest in time deposits because they not only offered higher returns but also less risks than stocks or bonds.

"Why should we invest in the capital market if we can gain higher returns on time deposits," he said.

"Time deposits offer more advantages than the capital market," he said.

Cyrill, the stock exchange's president, agreed that equities gave lower returns.

"If they do not want stocks and bonds, they can invest in mutual funds," he said. "Mutual funds can provide even higher returns than time deposits," he said. (09)