Selasa, 22 Januari 2013

Indonesia Company Sukuk Shortage Curbs Returns

JAKARTA,
Indonesia’s three best-performing Islamic bond funds say a rebound in corporate sukuk sales is failing to keep up with demand from investors chasing higher returns as government yields decline.

PT Insight Investments Management’s top-ranked I-Hajj Syariah Fund wants to boost company holdings from 80% if more securities become available, President Director Tony Henri said in an interview in Jakarta last week. Akbar Syarief, fund manager at PT MNC Asset Management, overseeing the second-best performer, said his confidence in finding buyers is not matched by certainty there will be sufficient supply.

“Right now the concern is that when money comes in, there may not be securities to invest in,” Jakarta-based Syarief, whose MNC Dana Syariah vehicle returned 3.7% this year, said in a June 26 interview. “Corporate sukuk will always be in high demand.”

The yield on Indonesia’s Shariah-compliant rupiah bond due August 2018 fell 1.11 percentage points in the past year to 6.20%, compared with the 8% average return for Indonesia’s six sukuk funds over the same period. PT Bank Muamalat Indonesia lifted its June sale to 800 billion rupiah ($85 million) from 500 billion rupiah after investors sought 2.2 times the amount first offered, Finance Director Hendiarto said.

Corporate sales have reached 1.5 trillion rupiah so far this year, compared with just 200 billion rupiah for the whole of 2011. Etty Retno Wulandari, a Jakarta-based director at the Capital Market and Financial Institution Supervisory Agency, said last month she expected 2012 offers to get to 3 trillion rupiah. However, official data shows the 20% average growth in outstanding corporate sukuk over the past five years still trails the 40% expansion in Islamic banking assets.

‘Don’t Actively Trade’

“Our fund could be much bigger but Islamic bond issuance isn’t growing as fast as banking assets,” Insight’s Henri said. “We don’t actively trade the company sukuk because once we sell it, it is difficult to look for new products to invest in.”

Worldwide sales of bonds that comply with Islam’s ban on interest climbed to $21 billion in 2012 from $14 billion in the same period of 2011, according to data compiled by Bloomberg. Offerings reached a record $36.7 billion last year.

Malaysia, the world’s largest sukuk market, has exempted investors from paying taxes on capital gains made on Shariah- compliant debt denominated in currencies other than the ringgit through 2014. Indonesia offers no similar incentive because it is committed to keeping Islamic products on an equal footing with non-Islamic securities, the Capital Market Agency’s Wulandari said last month.

Tax Benefits

“There needs to be tax benefits for the Shariah-compliant capital market to grow,” Insight’s Henri said. “Issuing Islamic bonds requires more processing and there needs to be a pay-off to make them more or equally lucrative as conventional bonds.”

The I-Hajj Syariah fund returned 4% this year and 10.3% in 2011, the most among the six Indonesian sukuk vehicles tracked by Bloomberg, which advanced by an average of 3.1% in 2012 and 8.8% last year.

Assets held by Islamic bond and stock funds in Indonesia increased by an annual average of 96% over the last five years and account for 3% of the nation’s total managed funds, Capital Market Agency data show.

“We plan to launch more sukuk funds going forward, if there are products,” MNC Asset’s Syarief said, adding that he would like to increase his allocation for corporate notes to 70% from 50%. “Government Islamic bonds tend to be more volatile and yield lower, so we need to balance our fund with corporate notes.”

‘Bright Outlook’

Global Shariah-compliant bonds returned 5.1% this year, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index, while debt in developing markets gained 7.5%, JPMorgan Chase & Co.’s EMBI Global Index shows.

The average yield on Islamic bonds fell one basis point, or 0.01 percentage point, to 3.44% on June 29, the lowest since August, according to the HSBC/NASDAQ Sukuk index. The difference between the average yield and the London interbank offered rate, or Libor, narrowed three basis points to 240 basis points.

Corporate Islamic debt sales in Indonesia this year amount to just 2% of Malaysia’s 23.4 billion ringgit (US$7.4 billion) of issuance in the same period, even though the former nation’s Muslim population is twelve times as big as its neighbors.

“Indonesia’s corporate sukuk market has a bright outlook,” Ruben Sukatendel, a Jakarta-based portfolio manager at BNI Asset Management, said in a June 27 interview. “It is possible that Indonesia’s Islamic capital market may catch up to Malaysia’s if we see synergy between market players and regulators,” said Sukatendel, who oversees BNI Dana Syariah, the country’s debut sukuk fund and the third-best performing this year. (Bloomberg/aph)

Source :
Bisnis Indonesia, 03 Juli 2012

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