Indonesia issues retail sukuk for COVID-19 economic recovery
Indonesia’s finance ministry issued retail sukuk SR013 on Friday (August 28) as part of the government’s efforts to finance the recovery of the country’s pandemic-hit economy.
Indonesia’s GDP contracted 5.32% in the second quarter due to the COVID-19 pandemic crisis, representing the country’s worst quarterly performance since the 1998 Asian Financial Crisis.
The sukuk has an indicative value of 5 trillion rupiah ($342 million) and the subscription period will end on September 23.
The ijarah-based retail issue has a three-year tenure and offers a fixed rate of return or coupon of 6.05% per year. The first coupon payment is scheduled for November 10.
“We expect an initial 5 trillion rupiah, but no matter how much the offering or subscription will be, we will eventually take it all given the interest from society will likely be much bigger that the indicative amount,” Dwi Irianti, Indonesia’s director of Islamic finance at the ministry of finance said at a virtual press conference on Friday.
“The coupon is very interesting. By buying this sukuk, it means society can also help our country in combating the COVID-19 pandemic because the funds will be used as part of the state budget to finance state spending in tackling the COVID-19 impact.”
The sukuk can be subscribed through online channels, which the ministry of finance hopes will make it easier for young Indonesians to invest from as little as 1 million rupiah ($68.40).
Indonesians can subscribe to the sukuk through 31 distribution partners that include 20 banks and five securities brokerage firms.
Malaysia also issued a retail sukuk, on August 18, to help its government finance the country’s recovery. The target issuance for Malaysia’s commodity murabahah retail sukuk is 500 million ringgit ($119.4 million).
Courtesy By :https://www.salaamgateway.com