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Jakarta. State pension fund Jaminan Sosial Tenaga Kerja plans to spend Rp 4.8 trillion ($537.6 million) to buy shares offered by state-owned Bank Negara Indonesia and Bank Mandiri in their secondary offering slated for later this year and early next year, its president director said.

The move by the fund, known as Jamsostek, is in line with its policy of boosting synergy among state-owned companies and promoting investments in blue-chip companies to increase earnings, Jamsostek president director Hotbonar Sinaga said over the weekend.

“We will acquire 20 percent of the total rights issue of both BNI and Mandiri and we are ready with Rp 2 trillion to buy BNI’s shares and Rp 2.8 trillion for Mandiri’s shares. The funds will be obtained from disbursements of Jamsostek’s deposits,” Hotbonar said on Saturday.

Hotbonar said that Jamsostek had already surpassed its target for returns on stocks and investments by the end of the third quarter of 2010.

“Our total investment is around Rp 85 trillion and if our investment return is 12 percent, that would mean we have Rp 10. 2 trillion ready to be reinvested,” Hotbonar said.

He said Jamsostek invested 30 percent of its funds in deposits at 14 various state, private and regional banks with annual interest rates of between 7 percent and 8.9 percent.

“The largest portion of the trillions in funds are deposited at state-owned BNI,” he said.

Jamsostek’s total assets are expected to exceed Rp 100 trillion by the end of the year, he said.

BNI corporate secretary Putu B Kresna said the bank would sell 3.37 billion new shares in a rights offer and expected to raise between Rp 7.8 trillion and Rp 12.5 trillion in fresh funds. Shares of BNI are expected to be priced at between Rp 2,300 and Rp 3,700 apiece, he said.

Mandiri’s president director, Zulkifli Zaini, said the bank was expected to raise Rp 14 trillion in fresh funds from the rights issue slated for early next year.

Hotbonar also said that the state pension firm would continue to boost its investment in blue-chip stocks such as telecom giant Telekomunikasi Indonesia, Indomie maker Indofood Sukses Makmur and cement maker Semen Gresik.

Workers participating in Jamsostek had paid a total of Rp 95 trillion into the fund through paycheck deductions as of the end of September, Hotbonar said.

“Payments from over nine million active Jamsostek members are about Rp 13 trillion a year or around Rp 1.1 trillion a month,” Hotbonar said, adding that Jamsostek had about 21 million inactive members whose deductions are not deposited by their employers. Those nine million active members of Jamsostek are employed by various companies operating in Indonesia.

“Only companies that employ more than 100 people have registered to become members. But if the smaller companies also join, the membership of the Jamsostek program could reach about 30 million,” he said.

Hotbonar said that in October he signed a memorandum of understanding with the Islamic Cooperative Development, a subsidiary of the Islamic Development Bank, to allow the establishment of a new investment company in the first quarter of next year.

The Jamsostek Investment Company is to become Jamsostek’s investment arm, focusing on equity participation.

Jamsostek and ICD will each put up Rp 500 billion in capital, which according to Hotbonar will be invested only in businesses with strong performance records and good prospects.

“We prefer strong, established businesses in agri-business or infrastructure. We can make direct investments ranging from Rp 5 billion to Rp 50 billion per project. By law, we will not face any restrictions at all and Mustafa Abubakar, the State-Owned Enterprises minister, fully supports this, along with his ministry,” Hotbonar said.

He said JIC’s business would be modeled after Singapore’s Temasek and Malaysia’s Khazanah but on a smaller scale.

“I am impressed by Singapore’s Central Providential Funds and Malaysia’s Employees Providential Funds. They have equity participation in Temasek and Khazanah,” Hotbonar said.