Govt optimistic mutual fund industry to recover this year

Jakarta (Antara News) - Finance Minister Sri Mulyani Indarwati has expressed optimism that the country`s mutual fund industry will grow at the same level as in 2004 or at a pre-crisis pace.

Foreign confidence in the mutual fund industry in Indonesia was returning, she said here Wednesday.

"The mutual fund market was volatile in 2005 due to massive capital flight. In 2008, the mutual fund market is expected to grow at an extraordinary rate and reach another historic high," she said.

"In 2007, the value of the mutual fund industry`s net assets grew by an average of 75 percent to Rp90 trillion. We are optimistic that it will hit a pre-crisis level as it did in 2004," she said.

The value of the mutual fund industry`s net assets reached a record high of Rp104 trillion in 2004, she said.

Meanwhile, the chairman of the Indonesian Mutual Fund Association (APRDI), Abiprayadsi Riyanto, said the value of mutual funds was expected to grow by 30-40 percent this year due to a decline in lending rates and the public`s improving investment awareness.

"The figure is large because at the end of last year it was already high. The growth of the mutual fund industry this year will not be as fast as in 2007 when it was recorded at around 70 percent as the value reached at the end of last year was high, namely Rp90 trillion. So, the expected Rp40 trillion increase next year will actually be the same as this year," he said.

The low lending rates would encourage the public to invest in more profitable financial instruments, including mutual funds, he said.(*)
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