Indonesia appointing 20 investment managers to run $1 bln of its haj fund

FILE PHOTO: Muslim haj pilgrims get on a plane to depart to Saudi Arabia at Sukarno Hatta airport in Jakarta on November 17, 2007. REUTERS/Dadang Tri

JAKARTA – Indonesia’s haj fund management agency (Badan Pengelola Keuangan Haji, BPKH) is selecting 20 investment managers to run 15 trillion Indonesian rupiah ($1.1 billion) of its haj fund that will be moved from Islamic bank deposits to capital market investments, Benny Witjaksono, a member of the agency’s executive board told Salaam Gateway.

The fund currently stands at 104 trillion Indonesian rupiah ($7.6 billion), around 65 percent of which is deposited in 23 Islamic banks. 15 trillion rupiah of this 67 trillion rupiah will be re-allocated into Shariah-compliant capital market instruments. They will then make up about 4.5 percent of total third party funds of the Islamic bank industry that stood at around 334.7 trillion rupiah at the end of 2017, according to data from the Financial Services Authority (Otoritas Jasa Keuangan, OJK).

“We will gradually move investments from deposits into capital market instruments,” said Witjaksono.