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Wednesday, October 28, 2009

Finance Ministry issued IDR200 billion sharia bonds

as published in Bisnis Indonesia daily newspaper
Rabu, 28/10/2009 00:00 WIB
Finance Ministry issued IDR200 billion sharia bonds

JAKARTA: Finance Ministry issued government sharia bonds (SBSN) worth IDR200 billion through bidding yesterday and set the IFR0003 series coupon at 9.25 percent.

In addition to IDR0003 with six years tenure, the government also sold IFR0004 with 11 years tenure and IFR0005 with 15 years tenure with indicative target of IDR1.5 trillion yesterday.

Sharia Financing Policy Director - Ministry of Finance Dahlan Siamat said the bidder offer stood at IDR4.17 trillion.

But the government only absorbed IDR140 billion of the total bidders and IDR60 billion of the non competitive bidders. The minimum absorption was due to the relatively high demand for yield.

"But, this shows the correction of yield demand level if compared to the sharia tender last two weeks," he said to Bisnis yesterday.

In the initial bid, the IDR0003 and IFR0005 sharia bonds two weeks ago, the government booked IDR5.08 trillion booking.

As from the total offers yesterday, the bidders offered the IFR0003 series at IDR1.42 trillion, IDR0004 IDR1.13 trillion and IFR0005 at IDR1.61 trillion.

Dahlan assumed the high yield offered by the bidders showed the premium demand of government sharia bonds liquidity risk with less instrument or transaction volume at secondary bond market.

The government has given little incentive in the coupons given to the participants. But the government could hardly provide high premium as the government bond issuance is no longer urgent.

"We still have some other instruments and now the government burden for bond issuance has been decreasing," he said without mentioning the figure.

Besides, sharia bank has become the dominant participants offering sharia bond yesterday, which was better than the former tender. (Bisnis/21)



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