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tate-owned enterprises (SOEs) should be pushed to go public and float their shares on the Indonesi Stock Exchange (IDX) in order to help increase the quality of the bourse as well as the economy in general, Desmon Silitonga, a market analyst, has said.

In the meantime, the IDX needs to prioritize the quality '€” instead of the quantity '€” of the companies listed on the bourse, said Desmon, an analyst with the Millenium Danatama Asset Management.

The presence of more established companies would be able to draw in investors, he added.

Given many SOEs already have well-known and established brands, the analyst argued, they would generate more confidence in investors about the certainty of their investments.

'€œMost companies tend to have initial public offerings [IPOs] for the purpose of adding to their funds or repaying their debts, resulting in the presence of many less-established companies in the market,'€ Desmon told the Jakarta Post on Friday.

'€œIf we are able to get [qualified] SOEs into the stock market, not only will it be good for them but it will also improve the quality of the companies in the stock market.'€

Also, due to the strength of the established companies, certain SOEs would be able to weather slumping market conditions because of their momentum.

'€œWhen the market reacts poorly, only a few companies will experience growth in the market. If there were any increases, it would come for the larger companies. It means that relatively smaller companies planning IPOs in current economic conditions could risk not having many investors on board and therefore opening to lower prices,'€ he added.

Previously, Financial Services Authority (OJK) director for capital market supervision Nurhaida said the government was trying to push SOEs to go public on the IDX as a way to stoke economic growth, which has slowed to rates unseen since 2009.

'€œThe global economic situation is fluctuating and it is affecting our economy as well. To improve our situation, we want to heighten the role of SOEs in the stock market and we will eventually ease regulations for them to do so,'€ she said.

With more SOEs in the stock market, Nurhaida argued that Indonesia could expect an increase in local investors, which would in turn make the market less dependent on foreign investors who are primarily affected by external conditions.

Only 33 SOEs have gone public, with 22 of them listed on the stock market.

PT PP Properti, a subsidiary of state-owned construction firm PT Pembangunan Perumahan, made a strong debut when it listed its shares on the IDX in May, closing 12.43 percent higher than its IPO.

With an IPO of Rp 185 per share, the price peaked at Rp 250 before closing at Rp 208.

The property firm, which is listed under the code PPRO, sold 4.91 million shares, or 35 percent of its enlarged capital, to the public on May 11 to 13, raising around Rp 883 billion (US$6.3 million) in funds.

This is the third new company to be listed on the IDX this year, and the first among state-owned enterprises. Previously, Bank Yudha Bakti raised Rp 58.6 billion ($4.5 million) from selling 300 million shares in January while hospital operator Mitra Keluarga Karyasehat raised
Rp 4.45 trillion in March.

Improving the portfolio of listed companies is among the targets of newly appointed IDX president director Tito Sulistio, who wants to triple the transaction value in the local stock market to Rp 15 trillion (US$1.13 billion) during his three-year term.

Tito said that he would invite more state companies, as well as small and medium-scale companies, including start-up firms, to go public in order to meet the target.