Indonesia sells its biggest-ever retail sukuk

JAKARTA – The Indonesian government issued 27 trillion rupiah ($1.9 billion) in tradable retail sukuk on Monday (September 20), the largest domestic retail bond sold via its online government securities (SBN) platform todate.

"The total volume of purchase orders was 27 trillion and 639 million rupiah to be exact, the largest retail sukuk issuance through our e-SBN platform so far, indicating that our local investors are still very interested in such instruments amidst relatively unstable financial market conditions," Dwi Irianti, director of Islamic Finance at the Ministry of Finance told Salaam Gateway.

The retail ijarah sukuk SR015 matures on September 10, 2024. Its underlying assets are state-owned and the 2021 state budget. 

The sukuk has a yield of 5.1%. It has a three-month minimum holding period and can only be traded in the secondary market after December 11. The first coupon payment will be on October 11.

SR015 investors key stats:

• 49,027 investors came from all provinces in Indonesia, mainly from Jakarta (31.47% of total investors)

• The biggest group of investors is millennials (36.62% of investors) and Generation Z comprised only 1.15% 

• By occupation, self-employed investors recorded the largest nominal purchase of 11.88 trillion rupiah (44% of total issuance), civil servants were the smallest group with nominal purchase of 954.82 billion rupiah (3.54% of total sales)

• Private employees accounted for the largest number of investors with 16,597 (33.85% of total investors).

“The household savings to be allocated in investments is increasing due to lower consumption during the pandemic, also the better familiarity or understanding of this instrument has made overall demand very high,” said Dwi Irianti.

Retail sukuk is only sold to local investors and issued once in the first-quarter of each year, with the exception of 2020 and 2021 when the government issued two each year. 

The government has issued 249.3 trillion rupiah in total from the first series SR01 to SR015.

Dwi Irianti added that the government plans to issue one more sukuk this year, the savings sukuk ST008 in early November. 

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