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Of the 44 state firms the government plans to privatize this
year, those operating in the commodity and infrastructure sectors are
most likely to attract investor interest, analysts say.
Fauzi Ichsan of Standard Chartered Bank said Friday the soaring prices
of commodities, in particular in the agriculture sector, would be the
key factor in luring investors.
"The commodity prices will keep increasing this year, and if there's a
decrease, it won't be too steep," he said.
Among the state firms the government plans to privatize are several
plantation firms that produce products such as palm oil and rubber.
Earlier this week, the government announced plans to privatize 44 state
companies, including 10 initially planned to be privatized last year.
It hopes to raise at least Rp 1.5 trillion from the privatization.
The government said the privatization was aimed at increasing the
companies' competitiveness and freeing the government from
non-performing assets, while also generating funds for the state
coffers.
However, having missed the privatization target three years in a row,
the government risks falling short of the target again this year,
partly because of adverse global economic conditions.
Fauzi said the government's target was achievable and that the country
could weather the negative global sentiment triggered by the fears of a
U.S. economic slowdown.
Besides the commodity-based firms, investors will also be interested in
companies operating in the development of infrastructure projects, he
said.
"The public or investors can take advantage of the government's plan to
focus more on developing the country's infrastructure this year," Fauzi
said.
Among the most prominent firms involved in the infrastructure sector
are construction companies PT Adhi Karya and PT Waskita Karya, as well
as steel manufacturer PT Krakatau Steel.
Adhi Karya in particular should be attractive as it is a listed
company, which Fauzi said, would be an added value for investors.
"Investors will trust their money in listed companies as they already
have met the standards of transparency and generally have good
management systems."
Anton Gunawan, Citibank's chief economist, said that while there were
specific factors that could determine investor interest, in the end it
would come down to the companies' financial condition and their
business prospects.
"In the end, that will determine how fast an investor enjoys their
return on investment," said Anton.
Sector-wise, Anton said he would bet on investment in the country's
banking sector.
"Although there's a fear over the current global economic conditions,
our banking sector won't be affected too much as it has now stabilized.
"Besides, the global economic slowdown, if it materializes, is
predicted to return to normal later on this year," Anton said.
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