Wed, 18 May 2011
From: The Jakarta Globe
By Suryani Omar

Investors in Malaysia and Indonesia say they favor sovereign sukuk over a planned dollar issue by the Islamic Development Bank after government securities returned almost twice as much as the multilateral lender’s this year.

IDB’s 1.775 percent Shariah-compliant debt due October 2015 gained 1.1 percent. Indonesia’s 8.8 percent US currency sukuk maturing April 2014 returned 1.6 percent, while Malaysia’s 3.928 percent June 2015 note climbed 3.1 percent, prices from Royal Bank of Scotland Group show.

The IDB bond’s yield of 2.1 percent compares with 2.96 percent for Indonesia and 2.4 percent for Malaysia.

MNC Asset Management in Jakarta and AmInvestment Management in Kuala Lumpur do not plan to bid at the IDB sale this month because sovereign debt offers less risk and higher yields. Rates on global sukuk are at a six-year low, prompting Sharjah Islamic Bank, Albaraka Banking Group and Qatar Islamic Bank to announce new sales, which climbed 20 percent this year.

“Since IDB is a very high-quality issuer, it will price at a pretty low yield,” Zeid Ayer, a fund manager at CIMB-Principal Islamic Asset Management, said May 11. “Investors who need to reach for yield probably won’t find this deal too attractive.”

The IDB will sell as much as $1 billion worth of sukuk this month, President Ahmad Mohamed Ali said on May 11. The lender, whose 56 member countries include Pakistan and Iran, is rated AAA by Standard & Poor’s and Aaa by Moody’s Investors Service.

Sergey Dergachev, senior portfolio manager at Union Investment Privatfonds, said a yield of 2.5 percent to 2.6 percent on the IDB sukuk would be needed to attract him because of “uncertain market conditions.”

“The IDB has a strong credit, and there is a scarcity of strong, corporate issues for sukuk,” said Dergachev, who helps manage the equivalent of $9.6 billion of emerging-market debt.

“I expect that we will see more volatility in global markets ahead, including sovereign debt issues in Europe.”

Global sales of sukuk, which pay returns on assets to comply with Islam’s ban on interest, rose to $5.6 billion this year from $4.6 billion in the same period of 2010. Offerings from the Persian Gulf fell 58 percent to $964 million.

Malaysia and Indonesia’s dollar-denominated Islamic bonds offer yields that Islamic Development Bank’s sukuk is unlikely to beat, according to MNC Asset Management and AmInvestment Management.

Indonesia plans to issue its second Islamic US currency bond in the second half of this year, Rahmat Waluyanto, director general at the Finance Ministry, said on May 11.

The country is rated BB+ by S&P, one level below investment grade, while Malaysia, the world’s largest market for sukuk, is ranked A-, the fourth-lowest investment grade.

“I’d rather wait for the Indonesian sale,” Akbar Syarief, a fund manager at MNC Asset Management, said on May 11. “The IDB sale will definitely not be able to offer higher yields compared to Indonesia because of the higher rating.”

Investors will also look for a yield premium from IDB on speculation the Federal Reserve will increase interest rates after leaving borrowing costs at between zero and 0.25 percent since 2008, Mohd Farid Kamarudin, executive director of sukuk and alternative investments at AmInvestment Management, said on May 11.

“If the yield on the IDB sukuk is around 2 percent, I can get better yields from Malaysia,” he said. “There’s the possibility of the Fed increasing rates.”



News Search/Filter
Transaction Rates
18 Nov 18
Buy
Sell
AED1
3,977.85
3,977.85
AFN1
193.47
193.47
ALL1
134.02
134.02
AMD1
30.36
30.36
ANG1
8,297.83
8,297.83
AOA1
47.08
47.08
ARS1
408.63
408.63
AUD1
10,718.84
10,718.84
AWG1
8,115.14
8,115.14
AZN1
8,582.29
8,582.29
BAM1
8,531.97
8,531.97
BBD1
7,305.68
7,305.68
BDT1
175.79
175.79
BGN1
8,531.81
8,531.81
BHD1
39,070.41
39,070.41
BIF1
8.26
8.26
BMD1
14,611.36
14,611.36
BND1
10,700.25
10,700.25
BOB1
2,131.43
2,131.43
BRL1
3,903.12
3,903.12
BSD1
14,611.36
14,611.36
BTC1
80,859,465
80,859,465
BTN1
204.87
204.87
BWP1
1,378.53
1,378.53
BYN1
6,971.21
6,971.21
BZD1
7,306.94
7,306.94
CAD1
11,113.39
11,113.39
CDF1
8.96
8.96
CHF1
14,621.81
14,621.81
CLF1
624,951.24
624,951.24
CLP1
21.82
21.82
CNH1
2,111.35
2,111.35
CNY1
2,105.99
2,105.99
COP1
4.61
4.61
CRC1
24.26
24.26
CUC1
14,611.36
14,611.36
CUP1
567.43
567.43
CVE1
150.18
150.18
CZK1
641.94
641.94
DJF1
82.07
82.07
DKK1
2,235.97
2,235.97
DOP1
293.22
293.22
DZD1
123.66
123.66
EGP1
822.34
822.34
ERN1
974.26
974.26
ETB1
527.54
527.54
EUR1
16,683.44
16,683.44
FJD1
6,934.35
6,934.35
FKP1
18,760.89
18,760.89
GBP1
18,760.89
18,760.89
GEL1
5,971.15
5,971.15
GGP1
18,760.89
18,760.89
GHS1
3,054.08
3,054.08
GIP1
18,760.89
18,760.89
GMD1
294.55
294.55
GNF1
1.62
1.62
GTQ1
1,909.06
1,909.06
GYD1
70.42
70.42
HKD1
1,866.23
1,866.23
HNL1
608.80
608.80
HRK1
2,245.93
2,245.93
HTG1
203.14
203.14
HUF1
51.86
51.86
IDR1
1.00
1.00
ILS1
3,944.21
3,944.21
IMP1
18,760.89
18,760.89
INR1
202.98
202.98
IQD1
12.34
12.34
IRR1
0.34
0.34
ISK1
119.14
119.14
JEP1
18,760.89
18,760.89
JMD1
116.95
116.95
JOD1
20,593.76
20,593.76
JPY1
129.50
129.50
KES1
142.98
142.98
KGS1
212.66
212.66
KHR1
3.64
3.64
KMF1
33.85
33.85
KPW1
16.23
16.23
KRW1
13.02
13.02
KWD1
48,396.08
48,396.08
KYD1
17,673.16
17,673.16
KZT1
39.84
39.84
LAK1
1.72
1.72
LBP1
9.73
9.73
LKR1
83.33
83.33
LRD1
92.40
92.40
LSL1
1,035.81
1,035.81
LYD1
10,551.98
10,551.98
MAD1
1,541.67
1,541.67
MDL1
857.46
857.46
MGA1
4.05
4.05
MKD1
271.16
271.16
MMK1
9.19
9.19
MNT1
5.86
5.86
MOP1
1,825.73
1,825.73
MRO1
40.92
40.92
MRU1
398.89
398.89
MUR1
420.71
420.71
MVR1
945.10
945.10
MWK1
20.18
20.18
MXN1
724.73
724.73
MYR1
3,489.04
3,489.04
MZN1
241.73
241.73
NAD1
1,035.81
1,035.81
NGN1
40.08
40.08
NIO1
455.43
455.43
NOK1
1,731.44
1,731.44
NPR1
128.04
128.04
NZD1
10,047.35
10,047.35
OMR1
37,957.59
37,957.59
PAB1
14,611.36
14,611.36
PEN1
4,354.25
4,354.25
PGK1
4,371.46
4,371.46
PHP1
277.93
277.93
PKR1
109.55
109.55
PLN1
3,866.10
3,866.10
PYG1
2.48
2.48
QAR1
4,044.49
4,044.49
RON1
3,575.56
3,575.56
RSD1
141.09
141.09
RUB1
221.43
221.43
RWF1
16.56
16.56
SAR1
3,894.33
3,894.33
SBD1
1,825.38
1,825.38
SCR1
1,068.98
1,068.98
SDG1
309.34
309.34
SEK1
1,622.37
1,622.37
SGD1
10,647.36
10,647.36
SHP1
18,760.89
18,760.89
SLL1
1.74
1.74
SOS1
25.46
25.46
SRD1
1,959.15
1,959.15
SSP1
112.16
112.16
STD1
0.69
0.69
STN1
674.88
674.88
SVC1
1,683.14
1,683.14
SYP1
28.37
28.37
SZL1
1,035.81
1,035.81
THB1
444.85
444.85
TJS1
1,563.04
1,563.04
TMT1
4,162.80
4,162.80
TND1
5,054.06
5,054.06
TOP1
6,377.60
6,377.60
TRY1
2,740.36
2,740.36
TTD1
2,185.19
2,185.19
TWD1
476.56
476.56
TZS1
6.37
6.37
UAH1
530.57
530.57
UGX1
3.94
3.94
USD1
14,611.36
14,611.36
UYU1
449.79
449.79
UZS1
1.77
1.77
VEF1
0.05
0.05
VND1
0.63
0.63
VUV1
132.60
132.60
WST1
5,594.99
5,594.99
XAF1
25.43
25.43
XAG1
210,513.09
210,513.09
XAU1
17,844,846.11
17,844,846.11
XCD1
5,406.10
5,406.10
XDR1
20,297.81
20,297.81
XOF1
25.43
25.43
XPD1
17,195,499.69
17,195,499.69
XPF1
139.80
139.80
XPT1
12,368,358.23
12,368,358.23
YER1
58.36
58.36
ZAR1
1,041.95
1,041.95
ZMW1
1,243.42
1,243.42
ZWL1
45.32
45.32
Taxation Exchange Rates
31 Aug 16 - 06 Sep 16
USD 1
13,232.00
AUD 1
10,043.30
CAD 1
10,213.70
DKK 1
1,999.40
HKD 1
1,706.22
MYR 1
3,283.28
NZD 1
9,623.63
NOK 1
1,605.23
GBP 1
17,433.70
SGD 1
9,757.68
SEK 1
1,569.45
CHF 1
13,631.10
JPY 100
13,101.00
MMK 1
11.01
INR 1
197.29
KWD 1
43,920.70
PKR 1
126.23
PHP 1
285.00
SAR 1
3,528.53
LKR 1
91.12
THB 1
382.08
BND 1
9,756.53
EUR 1
14,885.50
CNY 1
1,987.61

Okusi Associates: Indonesian Business & Management Services