Indonesia pension fund may raise equities' exposure

JAKARTA - Indonesia's state pension fund, PT Jamsostek, may increase its exposure to domestic equities because of better market conditions, but only to a limited extent as risks remain, a director said on Thursday.

The fund, which had about 64.4 trillion rupiah ($6.41 billion) of funds under management as of March, saw a 2 trillion rupiah rise in the value of investments in the first quarter.

The fund is targeting to grow its assets to 72.4 trillion rupiah this year, up about 18 percent from 2008.

"We will review our investment plan after the first half. But even if we decided to raise it (exposure to equities), it would probably only be up to about 17.5 percent," investment director Elvyn G Masasya told reporters.

"We need to sustain our investment gains," Masasya added, noting an initial plan to have 50 percent of its total portfolio in bonds, 30 percent in time deposits and 15 percent in equities. The remaining 5 percent is invested in other assets.

The unlisted firm achieved an unrealised gain of 520 billion rupiah ($51.73 million) as of May in its equity portfolio, helped by bullish market sentiment in the last few months, Masasya said.

The net value of Jamsostek's equity portfolio fell about 2.7 trillion rupiah last year, when the Jakarta's benchmark index .JKSE lost about half its value on the global financial crisis.

Masasya said he expected Jamsostek's total assets to rise 6.85 trillion rupiah this year.
The benchmark Jakarta composite index has climbed about 56 percent so far this year, helped by a resilient economic performance and as investors choose a higher risk exposure. From Reuters 11th June 2009.