Sukuk Analysis
2.3.4 Overview of Sukuk Development in Indonesia
Sukuk issuance by Indonesia has permitted the government to source options, financing in balancing its budget deficit while branching out its investor base. The Shari‘ah compliance market is quick rising with demand outstripping supplies. This situation creates pricing tension, especially for sovereign and quality issues. Indonesia Sukuk has been one of the helpers on the demand side which in turn offered excellent pricing.
The Indonesian government has successfully tapped the international market since 2009, it has become a regular issuer in the domestic market since its first launch in 2008. This positive development is putting the foundation of a pricing curve that will allow its cooperators to tap the international market using the government Global Sukuk as the benchmark. …show more content…
Corporate were the initial pioneers of Sukuk in the early 2000's. However, by 2008 the Indonesian government had taken the initiative to act out some laws to facilitate Shari'ah financing. This has resulted in Indonesian government taking the lead in issuing Sukuk on a regular basis, laying the framework for the issuance by corporates. Domestic Sukuk is a valuable tool for the Central Bank (BOI) policy in having Sukuk Negara as part of its monetary operation. Retail Sukuk provides for wider understanding and acceptance of Sharia compliant investments as well as encouraging savings. It is no surprise that the Banks and Insurance companies are taking up the majority of the Sukuk, as GOI offers “risk-free” return as well as duration investment to match their Asset and Liability. Also, encouraging to note that 18 percent of the market share of tradeable Sukuk are from individuals Retail
Sukuk issuance by Indonesia has permitted the government to source options, financing in balancing its budget deficit while branching out its investor base. The Shari‘ah compliance market is quick rising with demand outstripping supplies. This situation creates pricing tension, especially for sovereign and quality issues. Indonesia Sukuk has been one of the helpers on the demand side which in turn offered excellent pricing.
The Indonesian government has successfully tapped the international market since 2009, it has become a regular issuer in the domestic market since its first launch in 2008. This positive development is putting the foundation of a pricing curve that will allow its cooperators to tap the international market using the government Global Sukuk as the benchmark. …show more content…
Corporate were the initial pioneers of Sukuk in the early 2000's. However, by 2008 the Indonesian government had taken the initiative to act out some laws to facilitate Shari'ah financing. This has resulted in Indonesian government taking the lead in issuing Sukuk on a regular basis, laying the framework for the issuance by corporates. Domestic Sukuk is a valuable tool for the Central Bank (BOI) policy in having Sukuk Negara as part of its monetary operation. Retail Sukuk provides for wider understanding and acceptance of Sharia compliant investments as well as encouraging savings. It is no surprise that the Banks and Insurance companies are taking up the majority of the Sukuk, as GOI offers “risk-free” return as well as duration investment to match their Asset and Liability. Also, encouraging to note that 18 percent of the market share of tradeable Sukuk are from individuals Retail