Strong Demand for Indonesia's Sharia-Compliant Retail Bonds (Sukri)
There is strong demand for Indonesia's sharia-compliant government retail bonds (in Indonesian: Sukuk Negara Ritel, abbreviated Sukri). Since the launch of series SR-008 on Friday (19/02), a number of sales agents have run out of quota. These financial institutions now request additional quota from the government. The three year SR-008 series carries a fixed coupon of 8.3 percent per year (and is tradable on the secondary market). The government of Indonesia targets to collect up to IDR 30 trillion (approx. USD $2.2 billion) in funds from the issuance. Sukri bonds are only available to Indonesian citizens.
Twenty banks and six securities firms have been appointed by the Indonesian government as sales agents for the SR-008 retail sukuk series. One of the banks that has run out of quota is Bank Negara Indonesia (BNI). Anggoro Eko Cahyo, Director at BNI, said the issuance is oversubscribed and the bank's quota (IDR 1.8 trillion) has finished. Another example is Bank Tabungan Negara (BTN), which has had to put 273 investors on a waiting list (with a combined value of IDR 130.8 billion).
The offering period for SR-008 runs from 19 February 2016 to 4 March 2016. During this period investors can purchase a minimum of IDR 5 million and a maximum of IDR 5 billion worth of Sukri. The bonds are guaranteed by underlying assets in the form of projects set in the 2016 State Budget and government property in the form of land and buildings.
Indonesian Finance Minister Bambang Brodjonegoro said this Sukri bond is part of government efforts to develop the Islamic finance sector of Indonesia. He added that "retail sukuk (Islamic bonds) is a very good bridge between the quite large investor base and the financial sector that is less understood by our investors. Retail sukuk has its advantages because it is guaranteed by the state thus providing a sense of security to invest."
SR-008 Sukri Series Indonesia:
| Issuer |
Perusahaan Penerbit SBSN Indonesia |
| Series | SR-008 |
| Bond Type | Scripless (can be traded on secondary market) |
| Nominal Value | IDR 1,000,000 per unit |
| Offering Period | 19 February - 4 March 2016 |
| Issuance Date | 10 March 2016 |
| Listing Date on IDX | 11 March 2016 |
| Maturity Date | 10 March 2019 |
| Min - Max Subscription | IDR 5 million - IDR 5 billion |
| Coupon Rate | 8.3% |
| Coupon Payment Date | Every 10th of the month |
| First Coupon Date | 11 April 2016 |
| Minimum Holding Period | 1 time coupon payment |
Source: Finance Ministry
History of Sukri Bonds in Indonesia:
| Serie | Coupon | Listing Date | Maturity Date |
Sold (in IDR trillion) |
Number of Investors |
| SR-001 | 12.0% | 25/02/2012 | 25/02/2012 | 5.55 | 14,295 |
| SR-002 | 8.70% | 10/02/2010 | 10/02/2013 | 8.03 | 17,231 |
| SR-003 | 8.15% | 23/02/2011 | 23/02/2014 | 7.34 | 15,487 |
| SR-004 | 6.25% | 21/03/2012 | 25/09/2015 | 19.00 | 17,606 |
| SR-005 | 6.00% | 27/02/2013 | 27/02/2016 | 20.87 | 17,783 |
| SR-006 | 8.75% | 05/03/2014 | 05/03/2017 | 19.35 | 34,692 |
| SR-007 | 8.25% | 11/03/2015 | 11/03/2018 | 22.00 | 29,706 |
| SR-008 | 8.30% | 11/03/2016 | 10/03/2019 |
Source: Kontan