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Underperforming SOEs rely on publicly listed peers: Study
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The State-Owned Enterprises Ministry's headquarters is seen in this file photograph. (bumn.go.id/-)
S
tate-owned enterprises (SOEs) that have recorded weak performance may have to improve their finances by going public, as the few that have listed their shares on the stock market have performed better, according to research.
Eighty percent of the profit of 114 SOEs last year came from 20 publicly listed state enterprises, a study conducted by the University of Indonesia’s Economic and Business School Management Institute (LM-FEB UI) showed.
“Becoming publicly listed companies will [make them accountable] to investors; it will make them focused on managing their stock prices at a good level,” said the institute's managing director Toto Pranoto in Jakarta recently.
The combined profit of the 20 publicly listed SOEs in 2018 was estimated at Rp 150 trillion (US$10.61 billion), or 79.7 percent of all the SOEs profit at Rp 188 trillion.
In terms of revenue, the 20 SOEs contributed Rp 796 trillion last year, or 34 percent of all SOEs' revenue at Rp 2.3 quadrillion.
Data from state-owned investment firm Bahana Pembinaan Usaha Indonesia (BPUI) echoed the study, showing that the market had responded positively to the performance of listed SOEs.
BPUI president director Marciano Herman took the example of the case of three state-owned banks – Bank Negara Indonesia (BNI), Bank Mandiri and Bank Rakyat Indonesia (BRI). BNI became publicly listed in 1996, while Mandiri and BRI went public in 2003.
