The major fall in the capital market during 2008 has taken a toll on state-run occupational insurance company PT Jamsostek as the country's largest institutional equity and bond investor failed to secure its annual revenue targets from shares invested.
"We only achieved around 85 percent of the targeted net profit of Rp 1.17 trillion (about US$115 million)," president director Hotbonar Sinaga said Tuesday after meeting State Minister for State Enterprises Sofyan Djalil.
Hotbonar added the company had also failed to meet its membership target of 2.5 million workers.
"We only managed to tap around 85 percent of the targeted workers," he said.
According to Hotbonar, on the whole the company had not been successful in increasing its assets to the desired amount.
"We failed to reach the targets because of plummeting share prices, and also because of the decreasing mutual fund net value," he said.
In October last year, Indonesia's stock market did not escape the global financial turmoil, causing its share prices index to tumble by almost 50 percent.
Hotbonar said in December the company invested too much on the stock market, causing a substantial decline in its financial growth and a decrease in its stock value portfolio by Rp 4 trillion.
Among the shares owned by the company are those of PT Astra International, PT Astra Agro Lestari, Bank Central Asia, PT United Tractors and PT Unilever.
Hotbonar said that at the end of last year, shares only accounted for around 12.5 percent of the company's Rp 60 trillion asset portfolio, as compared to the 20 percent they had contributed at the beginning of the year.
However, Jamsostek also had some encouraging news, including a higher yield on investments by the end of last year, which reached an average return of over 10 percent, or around Rp 6 trillion, from its asset portfolio.
"Investment in bonds and deposits also increased considerably," Hotbonar said.
At the end of 2008, deposits made up over 30 percent of company assets, while bonds were over 50 percent and equities and direct investment accounted for only 20 percent.
Jamsostek plans to concentrate more of its investment on deposits given the fragile capital market environment.
Jamsostek collects regular premiums from workers in the form of savings until retirement, and covers payments for events such as accidents, dismissals, layoffs and illness as well as retirement pensions. (dis)
