INDONESIA - CAPITAL MARKETS - Indonesia to raise 1t rupiah sukuk in auction

(JAKARTA) Indonesia's finance ministry plans to raise one trillion rupiah (S$141.5 million) from a sukuk auction on Aug 2, including by issuing its first six-month syariah T-bills, the debt office said yesterday.

Syariah T-bills are seen as instruments that can add more depth to Indonesia's syariah bond market, which is far less liquid compared to neighbour Malaysia. (source)


'Syariah T-bills will be offered each month,' debt office chief Rahmat Waluyanto told reporters, adding the ministry expected to only issue up to two trillion rupiah of syariah T-bills this year estimating low demand.
Weak demand, the illiquid market and a local investor attitude of holding sukuk to maturity are seen as obstacles for Indonesia's government to develop the Islamic finance market in the world's most populous Muslim country.
The government also needs to secure more underlying assets to continue issuing sukuk. The government was recently forced to delay issuing sukuk for about two months because it did not get parliamentary approval for underlying assets.
Indonesia has issued 18.84 trillion rupiah of sukuk so far this year, compared to 29.97 trillion rupiah of issues in 2010, the latest debt office data shows.
Foreign investors hold 5 per cent of the total outstanding sukuk of 62.89 trillion rupiah, the data shows. -- Reuters

Source : http://www.businesstimes.com.sg/sub/news/story/0,4574,449347,00.html? - July 27, 2011