CAPITAL MARKETS - Government’s First Infrastructure-Backed Sukuk Offer Welcomed

Indonesia’s first sale of local-currency sukuk backed by roads and railways may benefit from the rupiah’s 4.7 percent gain against the US dollar this year and higher sovereign debt yields relative to Malaysia.

“I’d buy the sovereign sukuk as I believe the rupiah has more room to strengthen,” Mohd Noor Hj A Rahman, chief executive at OSK-UOB Islamic Fund Management, said on Thursday. “Yields are more attractive if you compare to what other markets are offering. You can’t get such high yields in Malaysia.”  (full story)

CAPITAL MARKETS - Indonesia Dollar-Denominated Bonds Drop to Six-Week Low

Yields on Indonesia’s Shariah- compliant dollar-denominated bonds dropped to a six-week low as Southeast Asia’s largest economy moved a step closer toward winning an investment-grade rating.

The rate on the benchmark 8.8 percent Islamic note due April 2014 fell 7 basis points, or 0.07 of a percentage point, this week to 3.47 percent and reached 3.4 percent, the lowest level since Jan. 20, according to the Royal Bank of Scotland Group prices. (source)