Saptono Adi Junarso, Executive Vice President Head of Privatization at the Indonesia Stock Exchange, confirmed that three state-owned companies are preparing their initial public offering (IPO) on the Indonesia Stock Exchange. These three companies are Wijaya Karya Realty, Tugu Pratama Indonesia, and Bank BRI Syariah.
Bank BRI Syariah, which is the Islamic finance unit of Indonesia's largest bank (in terms of assets) Bank Rakyat Indonesia (BRI), is expected to be the first among the state-owned enterprises (SOE) to list on the Indonesia Stock Exchange this year, somewhere in the first half of 2018. The company already conducted its mini-expose. Bank BRI Syariah will offer a 30 percent stake to the public. Its parent company BRI, which currently holds a 91 percent controlling stake in the Islamic banking unit, will still have a majority stake of 66 percent after the IPO. Per 31 December 2017 Bank BRI Syariah's assets stood at IDR 31.5 trillion (approx. USD $2.3 billion).
Budi Susanto, Managing Director of Danareksa Sekuritas, said his company will act as lead underwriter for the IPO of all three above-mentioned SOEs. However, Wijaya Karya Realty and Tugu Pratama Indonesia both still need to schedule their mini expose at the Indonesia Stock Exchange as they are await for approval from the Financial Services Authority (OJK).
Earlier, Aloysius Kiik Ro, Deputy for Restructuring and Business Development at Indonesia's Ministry of State-Owned Enterprises, said there are 11 SOEs planning to make their trading debut on the Indonesia Stock Exchange in 2018.
This would be a significant rise in IPOs of SOEs. In 2017 only four SOEs were added on the Indonesia Stock Exchange: Wijaya Karya Gedung, Garuda Maintenance Facility AeroAsia, Jasa Armada Indonesia, and PP Presisi. This is as many SOEs that conducted their IPOs in the 2008-2016 period. Hence, it shows that the Indonesian government has recently been pushing to list more of its companies on the local bourse in order to assemble more funds for investment and business expansion, while improving the corporate and financial performance of the entities.
Whether companies that list on the Indonesia Stock Exchange in the first half of 2018 can count on investor appetite partly depends on external factors. If the rupiah continues to weaken significantly ahead of the March Federal Reserve policy meeting, then foreign investors will be hesitant to invest in these companies. So far in 2018, foreign investors have been selling more Indonesian stocks than they bought.
Investor appetite for Bank BRI Syariah is expected to be high due to the strong performance of its parent company. Wijaya Karya Realty, on the other hand, is expected to be less appealing considering the cheap valuation of its parent company Wijaya Karya (Wika). Wika is among the state-controlled construction companies that need to take on significant debt in order to finance its part in the government's ambitious infrastructure program.
State-Owned Enterprises Expected to IPO on Indonesia Stock Exchange in 2018:
|State-Owned Company||Expected Timing||Expected Target
(in IDR trillion)
|Wijaya Karya Realty||1st half of 2018||1.5 - 2.0|
|PP Urban||2nd half of 2018||2.0|
|PP Energi||2nd half of 2018||2.5|
|Bank BRI Syariah||1st half of 2018||1.0|
|Indonesia Kendaraan Terminal||1st half of 2018||1.0|
|Krakatau Bandar Samudera||being studied||being studied|
|Pelabuhan Tanjung Priok||being studied||being studied|
|Patra Jasa||being studied||being studied|
|Tugu Pratama Indonesia||1st half of 2018||being studied|
|PG Rajawali 1||2nd half of 2018||0.5|
|Phapros||1st half of 2018||0.7 - 0.8|
Source: Bisnis Indonesia