Indofarma Leads the Decline in State-Owned Enterprise Stocks

The Indonesian Composite Stock Price Index (IHSG) of the Indonesia Stock Exchange, which repeatedly hit record highs throughout 2017, nearing the 6,000 level, was not mirrored by all state-owned company (BUMN) stocks. Of the 24 BUMN and subsidiary stocks, 14 actually declined in price, while the remaining 10 rose. This is one of the reasons why the increase in the IHSG lagged behind other Asian exchanges. This is because BUMN stocks usually drive domestic market increases.

PT Indofarma Tbk led the decline in BUMN and subsidiary stocks throughout 2017 (December 30, 2016 – October 13, 2017). The pharmaceutical issuer, largely owned by the government, plummeted almost 52 percent to Rp 2,250 per share. This was followed by PT Perusahaan Gas Negara Tbk (PGAS), which fell 39.26 percent, and PT Krakatau Steel Tbk (KRAS), which corrected by more than 35 percent. Poor financial performance and concerns about new investment funding caused several BUMN stocks to experience significant corrections this year.

Meanwhile, BUMN stocks in the banking sector still managed to record increases, led by PT Bank BTN Tbk, which rose more than 75.24 percent to Rp 3,050 per share (October 13th) from its year-end position of Rp 1,740.