The President Joko Widodo has asked State-Owned Enterprises (SOE) to offer their shares to public. However, in reality, after PT Semen Baturaja Tbk (SMBR) held its initial public offering (IPO) on June 28, 2013, there has been no SOE conducting IPO until today.
Instead of conducting IPO, SOEs are more focused on their corporate actions in capital market; meanwhile, several SOEs which have done IPO conducted public offering for their subsidiaries.
The Indonesia Stock Exchange (IDX) assessed the law which complicates SOEs for IPO is the Law Number 19 Year 2003 on SOEs.
In the regulation, there are at least 25 processes SOEs must undergo to hold IPO, including administering permits and socialization in the House of Representatives (DPR), before entering next process, such as with the Financial Services Authority (FSA) and IDX.
Therefore IDX asked related parties to simplify those processes, to be able to attract SOEs to conduct IPO. Using existing regulations, IPO process for SOE may take 2-4 years. Consequently, SOE’s managements seemed reluctant to undergo long and time-consuming procedures.
IDX also evaluated capital market investors tend to have interest in SOE’s stocks, which are deemed to have more promising returns. (*)
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