JAKARTA (TheInsiderStories) – Indonesian Ministry of Finance (MoF) officially opened the auction of SUKUK Savings with series ST004 for individual investors. The government sets an indicative target of Rp2 trillion (US$140.85 million) for the Islamic bond.
ST004 has a two-year tenor, offering from May 3 to May 21. Director general for finance and risk management at the MoF Luky Alfirman, said the yield of ST004 is quite interesting at 7.95 percent.
“These returns are floating floor, meaning that there is a reference from the BI rate with fixed spreads of 215 basis points. If the BI rate rises, it will be followed automatically,” he said at the launched of ST004 in Jakarta on Friday (05/03).
However, the bond cannot be traded on the secondary market. This instrument, he described, can be partially disbursed in the early redemption period which runs from April 23 to May 4, 2020. The maximum value that can be submitted is 50 percent of each purchase transaction.
This year, the ministry plans to issue 10 times the government bonds, specifically for retail investors. The government is targeting to raise funds of Rp80 trillion from the issuance of these instruments, both conventional and Sharia.
These funds will contribute to the gross government bonds issuance with total target Rp825.7 trillion this year. As of May 2019, the government has issued five retail bond instruments, namely SBR-005, ST-003, SR010, SBR006 and ST004.
Alfirman explained, there are four types of debt instruments to be issued this year, namely Indonesian Retail Bonds, Retail Savings Bond, Retail SUKUK, and Savings Bonds.
With the issuance of these bonds, the government hopes to embrace more retail investors. This year, the government targets to attract 100 thousand retail investors.
“Since the issuance of the previous SBR005, we have used Single Investor Identification so the number of registered investors is truly a single investor, not duplicated as before,” he said.
Affirman added, the issuance of debt instruments was intended to finance the government budget, including the implementation of physical and non-physical development. In addition to issuing retail bonds in the country, the government also plans to issue debt instruments in foreign currencies.
“At present, we are conducting a roadshow to see market conditions before issuing global sukuk. After that, we can only find out the time and rate of the instruments issued,” he said.
This year, according to Affirman, finance ministry still tends to choose to issue four types of global debt instruments, namely global bonds, global SUKUK, Samurai bonds and Euro bonds. Global sukuk issuance will also be issued in green sukuk.
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