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Never mind the ‘unruly players’, industry group says after mutual funds default
APRDI chairman of the presidium Prihatmo Hari Mulyanto said on Dec. 11 that the Financial Services Authority’s (OJK) recent suspension of mutual fund products issued by Narada Asset Manajemen and Minna Padi Aset Manajemen would not cause the mutual funds industry to crumble.
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Brokers monitor the Composite Stock Price Index (IHSG) in Jakarta. (JP/Nurhayati)
T
he Indonesian Association of Mutual Funds Managers (APRDI) has sought to assure investors that the recent default on several products will not cause a systemic impact to the overall mutual fund market.
APRDI chairman of the presidium Prihatmo Hari Mulyanto told the press on Dec. 11 that the Financial Services Authority’s (OJK) recent suspension of mutual fund products issued by Narada Asset Manajemen and Minna Padi Aset Manajemen would not cause the mutual funds industry to crumble.
“[The OJK] has handled the unruly players well, and there are still a lot of other good fund managers here in the country,” he said during a press conference in Jakarta.
Although the APRDI claimed the scandals would not disrupt the mutual funds industry, investors seemed spooked as the latest data from the OJK showed that mutual fund redemption had increased to Rp 65.99 trillion (US$4.72 billion) in November from October’s Rp 48.03 trillion.
On Nov. 13, the OJK issued a letter preventing management firm Narada Asset Manajemen from selling new or existing mutual fund products. The regulatory move followed the firm’s default of Rp 177.78 billion in payments to brokerage firms for equity transactions on Nov. 7.
The default caused several brokerage firms to experience liquidity problems and reduce their net adjusted working capital (MKBD), the OJK letter read. The authority urged Narada Asset Manajemen to repay its debt as soon as possible.
The letter told mutual funds agents to stop selling the Narada Saham Indonesia and Narada Campuran I mutual fund products issued by Narada Asset Manajemen.
