INDONESIA - CAPITAL MARKETS - Indonesia Yield Spread Over Malaysia Shrinks: Islamic Finance

www.thejakartaglobe.com  - The yield premium for Indonesia’s dollar-denominated Islamic bonds over Malaysia’s dropped by the most in a year this month as falling oil prices eased the burden on the budget and made room for economic stimulus.    

The spread between Indonesia’s 8.8 percent Islamic debt due April 2014 and Malaysia’s 3.928 percent note due June 2015 narrowed 33 basis points in June to 56 basis points. The yield on the Indonesian securities fell 41 basis points, while the Malaysian rate declined five basis points. Five-year credit-default swaps on Indonesian debt dropped 40 basis points in June, the most since October, according to data provider CMA, even as the rupiah headed for a fifth monthly decline.     (source)

INDONESIA - CAPITAL MARKETS - Sovereing Sukuk demand fell 29,6 %

www.bisnis.com - JAKARTA: investor demand for securities in Islamic countries (SBSN) or a state known as sukuk was listed on the auction day only Rp1, 59 trillion, down 29.6% from the previous auction of Rp2, 26 trillion.
Data Directorate General of Debt Management, Ministry of Finance says investors sukuk many countries pursue the tenor of 6 years to reach Rp916 billion PBS001.
Furthermore, incoming requests for the three other series that PBS002, PBS003, and PBS004 each of Rp266 billion, Rp261 billion and Rp150 billion.
The yield investors demanded to be in the range 5.8% -7.88% to 5.81% -7% breakdown for PBS001 series, 6.53% -7% for PBS002 series, 6.94% -7.5% for the series PBS003, and 7.28% -7.87% for the series PBS004.  (source)

INDONESIA - CAPITAL MARKETS - Sukuk Yields on the Slide as Govt Swamped With Eager Investors

www.thejakartaglobe.com - Yields on Indonesia’s Islamic bonds posted their first weekly decline this month on speculation supply will wane after the government rejected bids at an auction for the first time since March.

The yield on the 5.45 percent sukuk due January 2022 fell one basis point this week to 6.72 percent, the first drop since the period ending April 29.

The spread between the security and Malaysia’s benchmark 10-year Shariah-compliant note narrowed one basis point to 298 basis points during the week.  (source)

INDONESIA - CAPITAL MARKETS - Indonesia Debt Drops Most in 8 Months on Fuel: Islamic Finance

www.thejakartaglobe.com - Indonesian two-year sukuk, or the Islamic equivalent of bonds fell last month, pushing up yields by the most since September, as Standard & Poor's, kept the nation’s credit rating at junk after the government maintained fuel subsidies.

Yields on sovereign 8.8 percent Shariah-compliant dollar-denominated bonds due April 2014 climbed 39 basis points to 2.92 percent on April 30, according to data compiled by Bloomberg.

That compares with a 17 basis point drop in yields on Malaysia’s 3.928 percent global sukuk due 2015. The government’s inability to pare spending on energy subsidies will boost the budget deficit to 3.5 percent of gross domestic product, from 1.3 percent last year, President Susilo Bambang Yudhoyono said last week.   (source)

INDONESIA - CAPITAL MARKETS - BSM Subordinated Sukuk Renders 10% Yield

JAKARTA (IFT) – PT Bank Syariah Mandiri (BSM) will render a 10 percent yield for its subordinated sukuk or Islamic subdebt of Rp 500 billion that will be a limited issuance. The proceeds will be used to increase the company’s capital adequacy ratio (CAR). (source)

INDONESIA - CAPITAL MARKETS - Investment grade in sight on successful global sukuk sale

The government’s successful selling of US dollar-denominated Islamic bonds known as sukuk at a cheaper rate signals declining risks of investing in Indonesia.

Even more convincing, the sukuk sales came amid global financial market uncertainty, bringing the country closer to an investment grade rating. (source)

INDONESIA - CAPITAL MARKETS - Indonesia Sells $1 Billion Sukuk at Half 2009 Yield Level

Nov. 15 (Bloomberg) -- Indonesia sold $1 billion of seven- year Shariah-compliant bonds at half the borrowing cost of its previous sale in 2009, reflecting investor optimism that the nation may win an investment-grade debt rating.

The dollar-denominated securities sold at 4 percent, data compiled by Bloomberg show. The sale targeted a rate of 4.25 percent, said a person familiar with the transaction, who asked not to be identified as the details are private. The nation’s debut sukuk, $650 million worth of five-year debt, was issued in April 2009 at 8.8 percent.  (source)

INDONESIA - CAPITAL MARKETS - Indonesian Islamic bond Sales will Recover, S&P Says

Indonesian Islamic bond sales will recover from the slowest half in three years as the government finances transport and power projects, according to Standard & Poor’s.

The government’s $140 billion five-year development program will boost offerings, said Allan Redimerio, S&P’s head of Asia infrastructure ratings in Singapore.  (source)

INDONESIA - REGULATIONS - Sharia banks must calculate yield risk

JAKARTA: Sharia banks are obliged to identify and manage risk from yield and investment, as the central bank makes the regulation on risk management effective starting Nov 2.

According to the new regulation on risk management, sharia banks and sharia units must apply ten risk managements. Most of the risk managements are similar to those apply to conventional banks plus two new risks, namely yield risk and investment risk. (source)