Thursday, November 19, 2009

Indonesian Pension Fund to start Islamic Unit

PT Jaminan Sosial Tenaga Kerja, Indonesia’s state pension fund, said a joint venture with the Islamic Corporation for the Development of the Private Sector is expected to start operations next year.
The initial paid up capital of the joint-venture will be about 1 trillion rupiah (US$106.2 million [RM357.63 million]), with Jamsostek, as the fund is known, taking majority ownership, Hotbonar Sinaga, its president director, told reporters in Jakarta, reports Bloombergs (Nov 16, 2009).
The report said the company has submitted the proposal to Indonesia’s finance and state enterprise ministers.
It qouted Sinaga as saying: "The new unit is expected to be in operation at the earliest in the first quarter of next year."
Companies like Jamsostek aim to pull more investments from the Middle East to overtake Malaysia as the Asia-Pacific region’s Islamic finance hub, it added.
The Islamic Corporation for the Development of the Private Sector is the investment unit of Saudi Arabia’s Islamic Development Bank.
"The joint venture unit is expected to boost our investments," Sinaga said, without elaborating.
The report added the Jakarta-based pension fund manager plans to shift around 4 trillion rupiah of its funds from bank deposit to bonds to capitalise on the high yield in the corporate and government bonds, Sinaga said.
Jamsostek manages about 75 trillion rupiah of funds as end of August and is seeking to increase the amount to 80 trillion rupiah by the end of this year, Sinaga elaborated. Shariah law bans the payment and receipt of interest, prohibits investment in businesses related to gambling and alcohol, and stresses profit sharing.

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