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)

MALAYSIA - CAPITAL MARKETS - Sukuk success due to rarity

KUALA LUMPUR: Malaysia's success in attracting US$9bil of orders for a US$2bil sale of sukuk reflects a one-year drought in global issuance by sovereign borrowers.

The nation's record dollar-denominated offering of US$1.2bil of five-year notes and US$800mil of 10-year debt was snapped up by more than 320 investors in Europe, Asia, the Middle East and the United States, the Government said in a statement yesterday. (source)

CAPITAL MARKETS - Sukuk Sales on Hold Until House Gives Approval

Indonesia has postponed Islamic bond sales for the past eight weeks as legislators delay approvals needed for new securities.

The government postponed auctions of rupiah sukuk due in five, 10 and 15 years on May 31 and June 14. Local companies have sold Rp 200 billion ($23 million) of Islamic bonds this year, compared with Rp 700 billion in 2010.  (source)

CAPITAL MARKETS - Indonesia Rating Bets Drive New Sukuk Demand: Islamic Finance

Speculation Indonesia’s credit rating will be raised to investment grade may drive demand for the government’s second sale of global Islamic bonds.

I’d be interested because there’s the possibility of an investment-grade rating,” Mohd Noor Hj A Rahman, chief executive officer at Kuala Lumpur-based OSK-UOB Islamic Fund Management Bhd., said in an interview May 12. “Indonesia is a big market with potential for economic growth.” (full story)

FINANCIAL MARKETS - Govt set to offer third retail sukuk in February

The Finance Ministry’s Debt Management Office (DMO) officially appointed 20 banks and securities companies Friday as the sales agents of Islamic bonds (sukuk) that will be sold to Indonesian individuals next month, officials say.

Director general of debt management Rahmat Waluyanto said the government would not limit the amount of funds to be collected from the sukuk offering.

SUKUK - Indonesia May Sell Dollar Debt Aimed at Local Market to Curb Price Swings

By Lilian Karunungan -

Rahmat Waluyanto, director general of the Finance Ministry's debt management department. Photographer: Dimas Ardian/Bloomberg 

Indonesia may offer dollar- denominated conventional and Islamic bonds targeted at local investors this year, seeking to curb price swings caused by capital outflows.

“In the next issuance of global bonds, we might want to increase the allocation for domestic investors, or we might issue entirely in the domestic market,” Rahmat Waluyanto, director-general of the Finance Ministry’s debt management department, said in an interview in Jakarta yesterday. “We need to be vigilant as this can cause some potential risks, especially if there is any trigger to market volatility.”

SUKUK - Indonesian Government Banks on Rupiah Bonds (and Sukuk) to Cover the Budget Gap

Jakarta. The government has announced plans to take advantage of strong investor appetite for Indonesian assets and rely more on rupiah-denominated bonds than foreign-exchange debt to cover the budget deficit next year.

“That is our priority. We hope that the domestic debt market will be more developed and the base of investors will also increase,” Rahmat Waluyanto, director general of debt management at the Finance Ministry, said over the weekend.