Saturday, August 16, 2008

Indonesia’s sukuk spur

The Indonesian government’s first-ever Islamic bond sale later this month will administer a long-awaited jolt to the moribund Shariah financing sector in the world’s most populous Muslim nation, reports Dow Jones Newswires on Aug 17.
After years of planning, the Ministry of Finance on Aug 13 held meetings with institutional investors in the East Javanese capital of Surabaya and the resort city of Bandung and will kick off the main public roadshow Thursday in Jakarta, it said.
The wire service said the rupiah-denominated bond, set to price on August 26, is likely to be for around $1bn and will be followed by a similarly sized US dollar-denominated offering by mid November.
On the structure, it said the government’s upcoming deals will use the ijarah, or lease, structure backed by 18.37tn rupiahs (US$2bn) worth of land and buildings that the government has set aside.
On Aug 14, Rahmat Waluyanto, treasury director general at the ministry, told reporters that the government had not set the target return for the offering. Conventional treasury bonds with the same maturity will be used as a proxy to set the return on the paper, according to Reuters.
PT Mandiri Sekuritas, PT Trimegah Securities Tbk, and PT Danareksa Sekuritas were appointed as the selling agents for the domestic offering.
On July 18, newswires reported that the republic had postponed its first US dollar sukuk issuance to Nov 2008. Earlier, on June 30, The Malaysian Reserve reported that HSBC Amanah, through its Kuala Lumpur-based Islamic finance practice for the Asia Pacific, was in the running to play a leading role in Indonesia's proposed US$1 billion (RM3.26 billion) global sukuk issuance.