The privatisation of state assets is a trend the world over, and Thailand is no exception. Of the 60 state-owned enterprises (SOEs) recognised by the State Enterprise Policy Office, six are listed on the SET. An additional 11 listed companies have significant SOE or government-linked shareholders.

Stock market and MCOT executives share a toast to mark the state broadcaster’s first day of trading.

In total terms, these SOEs represent a significant share of the SET. At the end of 2005, the six listed SOE companies accounted for 27% of the SET's total market value. And, in aggregate, these companies have largely outperformed the rest of the market.

All but Thai Airways International had positive TSRs in 2005, and the group generated an average TSR of 38.6%. In comparison, the average one-year TSR of the broader SET was 20%.

The sources of these superior returns are mixed. Market leaders tend to outperform their smaller rivals in creating value, and in the energy industry, PTT dominates. Together with its E&P subsidiary, these two former SOEs accounted for 76% of the industry's total value.

Though both the third largest in their respective industries, Krung Thai Bank and MCOT prospered in part because of industry-specific conditions. That said, both surpassed their respective industry average return levels.

Transport stocks continued to lag the broader market. Together, THAI and Airports of Thailand account for two-thirds of the listed transport industry. The flag carrier's poor performance and recent management turmoil led to returns below the SET and SOE averages, although AOT still managed to beat its industry peers in a difficult year for transport companies.

Interestingly, all SOEs, save one small startup, had positive three-year TSRs. On a weighted-average basis, the larger group of 17 companies generated an impressive return of 60% annually since December 2002. The broader SET generated a 43.1% annual return over the same horizon.

SOEs are routinely criticised for being inefficient and slow to modernise. But at least over the past few years, they have remained stable creators of value for investors, and in some cases, more lucrative than their privately owned peers.