Market Roots for PLN, Pertamina IPO Discourse

TEMPO.CO, Jakarta - Market participants are expected to respond positively if Pertamina and PLN indeed go public. David Cornelis, chief researcher at KSK Financial Group, said investors believe that both state companies' public status will create transparency and good corporate governance (GCG).

David said the SOEs are Indonesia's market leaders in its respective sectors. Going public would allow the company to grow more and faster. "As market leaders, they become agents of change and growth," he said when contacted yesterday.

David's statement is a response to the discourse to have Pertamina and PLN go public in a bid become more transparent in managing subsidy budgets. According to David, the demand for transparency will automatically minimize pressure from various parties. "There will be less intervention," he said.

Pertamina upstream director Muhummad Hussein responded positively to suggestion for the oil company to list its share in the Indonesia Stock Exchange (IDX). However, he said, the initial public offerings (IPO) must be done carefully because Pertamina is a strategic company. The government should also set up policies related to the company's status change from an SOE into a public company.

The discourse to make Pertamina and PLN public companies surfaced last weekend. Effendi Simbolon, the House of Representatives' Energy Committee member, said the move is necessary to allow transparency in both companies' subsidy budget management, "so that the public will have easier access to control [budget use]," he said in Jakarta last weekend.

PLN corporate secretary Adi Supriono asked the government and the DPR to review the IPO suggestion. Adi referred to gas company PGN (Persero) Tbk, which has gone public on IDX, saying that PGN's is profit oriented. "PLN is associated with the lives of many people, so our orientation is not only for profit, but for public service as well," he said. 

FAIZ NASHRILLAH | ALI HIDAYAT | AYU PRIMA