Bank Muamalat, Indonesia's second-biggest Islamic lender, sees more firms issuing global sukuk this year to benefit from lower yields on dollar-denominated bonds and a strengthening rupiah."The sukuk issuance potential is very good this year given the recent appreciation of the rupiah to the dollar," Hendiarto, Muamalat's finance director said on Monday. (full story)
The rupiah has gained 5.3 per cent so far this year to take it to a 7-year high, leading to currency gains for dollar issuers.
A conventional 10-year global issue last month also yielded 5.1 per cent, versus 7.7 per cent on equivalent local currency bonds.
Hendiarto said the prospect of the country getting an upgrade in the next 18 months to an investment grade sovereign rating, which would put it on a par with BRIC nations, would also spur global sukuk issuance.
The lender told Reuters last year that it plans to issue up to $100 million of global sukuk, the first time for the bank to issue dollar-denominated Islamic notes. "We haven't decided the exact amount as it will depend on need," said Hendiarto, eyeing Middle East investors.
The bank plans to open new branches in Jeddah and Hong Kong this year to increase its exposure to remmittance transactions.
The world's most populous Muslim nation has been relatively slow to develop its Islamic debt market, lagging neighbour Malaysia.
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