Minister of State-owned enterprises (SOEs) Erick Thohir has confirmed that six SOEs listed on the Indonesian Stock Exchange will buy back their shares. This step is in efforts to shore up the domestic money market amid the coronavirus outbreak.
“We are processing (proposals for) share buyback at the stock exchange. But, for the time being, I have only allowed six companies,” Erick said in a video conference in Jakarta on Friday, March 20.
As for the six SOEs that will buy back their shares are Bank Rakyat Indonesia Tbk (BBRI), Bank Mandiri Tbk (BMRI), Bank Negara Indonesia Tbk (BBNI), Telkom Indonesia Tbk (TLKM), PT Bukit Asam Tbk (PTBA), and Jasa Marga Tbk (JSMR).
He said SOEs have to see the trend, and added that some of the SOEs had realized a buyback program in stages.
“We must agree to see the trend. The momentum must be right. This is one of the things on which we are focusing in the monetary sector,” he said.
However, he considers that only SOEs with a solid financial performance will be allowed to buy back their shares.
On the other hand, SOEs Vice Minister Kartika Wirjoatmodjo has previously asked SOEs to use the funds for share buybacks tactically that will likely last for quite a long time, in accordance with fundamental principles.
According to him, SOEs that will buy back their shares have good liquidity. Therefore, the buyback will not affect these SOEs financial performance.