State-Owned Enterprises Face Cautious Outlook for 2026

Investor Sentiment Remains Reserved

The performance of Indonesian state-owned enterprises (SOEs) is expected to maintain its current trajectory into 2026, largely influenced by prevailing investor sentiment that remains in a wait-and-see mode. This cautious outlook is reflected in the lackluster performance of the IDX BUMN20 index, which has managed to climb only 7.48% year-to-date (YTD), significantly underperforming the broader Indonesian Composite Index (IHSG), which has surged 20.59% over the same period.

Foreign Investor Activity

Foreign investors have been net sellers in several prominent SOE stocks, particularly in the banking sector. PT Bank Rakyat Indonesia Tbk (BBRI) has seen the most significant foreign outflows, with sales amounting to Rp 8.82 trillion YTD. Other major banking stocks have also experienced substantial foreign investor divestment, including PT Bank Mandiri Tbk (BMRI) at Rp 13.8 trillion and PT Bank Negara Indonesia Tbk (BBNI) at Rp 4.19 trillion. This selling activity indicates a cautious stance among foreign investors regarding Indonesian SOEs, particularly those in the banking sector.

Market Performance Analysis

The underperformance of the IDX BUMN20 index relative to the IHSG suggests that investor preference is leaning towards other sectors or more growth-oriented stocks. The current market dynamics indicate that investors are favoring broader market exposure over specific bets on SOEs, despite their fundamental strengths and government backing.

Outlook for 2026

Looking ahead to 2026, the prospects for SOE performance appear stable but unexciting. The prevailing wait-and-see attitude among investors is likely to persist unless there are significant policy changes or improvements in market sentiment. As such, SOEs will need to demonstrate stronger growth or more compelling investment narratives to attract both domestic and foreign investment.