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)

TAKAFUL - Insurers buy gold over sukuk to boost returns

Indonesia’s Islamic insurers are starting to favour gold over bonds amid the fastest inflation in almost two years, seeking to boost returns following a ruling that allows them to invest in the precious metal.

PT Asuransi Takaful Keluarga, the country’s largest Islamic insurer, is looking to cut holdings of short-term shariah- compliant bonds to shift into the commodity, Ernawan Priarto, head of finance and accounting, said in an interview in Jakarta on February 18. Indonesia’s two other takaful operators, PT Jaya Proteksi Takaful and PT Asuransi Syariah Mubarakah, are also considering purchases of gold. (source)