Publicly listed state firms are getting closer to reclaiming the glittering heights in terms of economic performance that many of them achieved before the financial crisis hit the stock market in the final quarter of 2008.
A combination of good performance and the enduring trust of both domestic and foreign investors have helped the shares of the state-owned companies to continue to appreciate, a hearing between the government and legislators heard on late Tuesday night.
The combined market capitalization of the top 14 publicly listed state firms as of July 17 reached Rp 521.7 trillion or equivalent to 31.42 percent of the total market capitalization of all the companies listed in the Indonesian Stock Exchange.
The Rp 521.7 trillion value on July is already 14 percent higher than it was as of Sept. 5 last year when the financial crisis forced down the combined value of the state firms’ shares, which then hit the lowest level of that year.
The highest record in terms of capitalization was achieved earlier in the year on May 23, 2008, when the combined value of the shares of the 14 top state firms had reached a total of Rp 546.2 trillion.
Speaking at the hearing that night, state minister for state owned enterprises Sofyan Djalil said the biggest contributors to the total market capitalization were telecommunication company PT Telekomunikasi Indonesia (Telkom), Indonesia’s fourth biggest bank by assets PT Bank Rakyat Indonesia (BRI) and gas producer PT Perusahaan Gas Negara (PGN).
As of July 17 this year, the market capitalization of each of these three high performing companies reached totals of Rp 161.28 trillion, Rp 83.03 trillion and Rp 79.66 trillion respectively, reflecting improved economic climate and performance.
“The performance of the state firms, in general, has been satisfactory. Market capitalization aside, the net profit growth of the firms is also healthy,” Sofyan said.
The recovery of IDX largely relies on investors confidence in Indonesia’s economic growth and the wide margins of profit generated by the local market in comparison to many other markets in Asia.
The government says the economy may grow by a total of 4.3 percent overall this year, making Indonesia one of few Asian countries that will book positive growth this year, along with China and India, while the IDX expects its market capitalization to continue to rise, despite some recent corrections, and to reach a grand total of up to Rp 2,000 trillion (US$201 billion) by the end of this year.
Investor’s confidence in the Indonesian market is continuing, regardless of pressures that recently included the twin bomb attacks in the financial capital Jakarta on July 17.
The latest data from the Indonesian Central Securities Depository (KSEI) shows that as of August foreign investors controlled 66.1 percent of assets in the local stock market, signaling a return of foreign investor confidence. (naf)
