Indonesia s 63 billion social security fund eyes doubling equities exposure

JAKARTA – Indonesia’s US$48 billion (S$63.3 billion) social security fund BPJS Ketenagakerjaan, the country’s largest institutional investor, aims to raise the share of local equities in its portfolio to up to 20 per cent within three years, a top official told Reuters on April 11.

Asked about this week’s local stock market tumble following the global turmoil caused by US tariffs, Mr Edwin Ridwan, the agency’s director of investment development, said it had created room for the fund to invest in undervalued shares.

The state-owned fund has been increasing its investment gradually in stocks with big market capitalisation, he said, in sectors such as banking, telecommunications, commodities and consumer goods.

“These are the conditions where people are selling, if we look at history... whenever the market overshoots, people are selling, it’s the best time to buy,” he said in an interview, referring to the financial crises of 1998 and 2008 and the Covid-19 pandemic.

“The window has started to open up for us to increase our exposure to equities, because we need volume, we need liquidity, and with everybody selling, that liquidity is being provided.”

Mr Edwin added that the fund was targeting a 13 per cent year-on-year increase in returns in 2025.

BPJS Ketenagakerjaan’s current exposure to equities was around 10 per cent or equivalent to US$4.8 billion, either directly in the stock market or through mutual funds, it said, adding that its target is to expand that to between 15 per cent and 20 per cent within three years. The largest portion is invested in bonds, and the rest is in deposits and other instruments.

Indonesia’s stock market tanked when it reopened on April 8 after an extended holiday break, triggering a 30-minute trading halt, in response to the global turmoil over US President Donald Trump’s tariffs announcement