State-owned insurance company Jamsostek last year merged with other agencies to form the Social Security Organizing Body, or BPJS. (JG Photo/ Dhana Kencana)

BPJS Ketenagakerjaan Bullish on Capital Markets

BY :AGUSTIYANTI

JANUARY 25, 2015

Jakarta. The branch of the Social Security Organizing Body focusing on workers’ welfare, known as BPJS Ketenagakerjaan, expects to book up to 17 percent growth in its investment returns this year, as it foresees higher funds under management and maintains a bullish outlook toward the prospects of the local stock markets.

Elvyn G. Masassya, president director of BPJS Ketenagakerjaan, previously known as Jamsostek, projected the agency to manage a total of Rp 220 trillion ($17.6 billion) in funds this year, up 17.65 percent from last year’s Rp 187 trillion.

The agency was the result of a merger between state-owned insurance company Jamsostek, state pension fund for civil servants Taspen and Asabri (state pension funds specifically for military, defense ministry and the police).

BPJS Ketenagakerjaan manages pension funds of Indonesia’s workers, mostly from the formal sector, and invest the money in the capital markets, from financial instruments to property.

The government has made it compulsory for companies operating in Indonesia to register their employees with the agency, which provides pension funds and life insurance.

The agency was the result of a merger between state-owned insurance company Jamsostek, state pension fund for civil servants Taspen and Asabri (state pension funds specifically for military, defense ministry and the police).

BPJS Ketenagakerjaan plans to invest 20 percent of its funds under management into the equity markets, Elvyn said.

“We have a collection of stocks under our portfolio, which will perform quite well due to the impact of the government’s policy this year,” he said.

Elvyn declined to provide further details, but economic analysts have said the infrastructure and shipping industry will benefit from President Joko Widodo’s policy to siphon billions dollar into both sectors after his administration decided to trim subsidies on fuel.

Elvyn said the agency will also place its funds into deposits, mutual funds, government bonds and the property sector.

The Jakarta Composite Index (JCI) rose 1.35 percent to close at 5,323.885 points on Friday, with foreign investors purchasing Rp 1.6 trillion more in shares than they sold. The index has gained 1.85 percent so far this year.

Joko’s move to cut spending on fuel subsidies received praise from investors, as it is expected to make room in the state budget for more productive industries.

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