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| There is more than $21 billion in assets under management in Indonesia’s mutual fund industry, and that could rise by up to 15 percent this year as incomes increase and people seek out investments. (Bloomberg Photo) |
Growing interest by Indonesians seeking to increase their wealth and positive sentiment from two credit rating agencies that pushed the country’s sovereign debt level to investment grade helped to put the mutual fund industry on a strong footing in the first quarter.
Total assets under management in the mutual fund industry rose 28 percent to Rp 193.1 trillion ($21 billion) in the January-March period from a year earlier, according to data from Indonesia Mutual Fund Managers Association (APRDI).
The economy last year grew 6.5 percent, the fastest pace since 1996, and that helped to lift average per capita income to $3,500 from $3,000 in 2010 — elevating many of the country’s 240 million people into the middle class.
“Per capita income has increased to more than $3,000 now, so there are more people wanting to invest,” Abiprayadi Riyanto, the APRDI chairman, said on Tuesday. Investments in funds start as low as Rp 100,000, he added.
Assets in the mutual fund industry may rise by 10 percent to 15 percent this year, “as long as the conditions in Europe are improving,” Abipriyadi said.
That compares to a 13 percent year-on-year increase in 2011 to Rp 168.2 trillion.
Abipriyadi said the upgrade in Indonesia’s sovereign credit rating by Moody’s Investors Service and Fitch Ratings in the past few months had been a leading draw for foreign investors. Standard & Poor’s Ratings Agency, though, on Monday maintained its credit rating at junk status.
Rising equity prices also helped. The benchmark stock measure, the Jakarta Composite Index, has gained 8.8 percent this year, closing at a record high earlier this month.
Foreign investors owned 55 percent of the country’s financial market instruments, including stocks, bonds and derivatives, according to the latest data from Capital Markets and Financial Institution Supervisory Agency (Bapepam-LK).
Assets in balanced funds, which invest in stocks and bonds in roughly equal amounts, surged 72 percent to Rp 34.5 trillion. These funds accounted for 18 percent of total assets.
Fixed-income funds, which invest mostly in bonds, rose 66 percent to Rp 42.5 trillion, accounting for 22 percent.
Equity funds — which account for 30 percent of total mutual-fund assets — climbed 15 percent to Rp 58.6 trillion.
Shariah funds, money-market funds, protected funds, exchange-traded funds and index funds made up the remaining 30 percent.
Money-market funds, which invest mostly in bank deposits, were up 58 percent in assets to Rp 11.9 trillion.
On the other hand, protected funds, which guarantee no asset loss, declined 3 percent to Rp 40.6 trillion in assets.
Abipriyadi said three mutual funds had been closed this year because their total assets under management were way below the minimum-required level of Rp 25 billion.
source:thejakartaglobe.com
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