Demand for Local Sukuk ‘Excessive’ With More Likely Ahead, Official Says

The government has issued Rp 120 trillion ($12.8 billion) in Islamic bonds during the past four years, which the Finance Ministry attributes to an “excessive” demand for them among Muslim investors.

The ministry’s director for Shariah financing, Dahlan Siamat, said the government issued its first Islamic bond, known as sukuk, in 2008, and as of Thursday it had issued a total of Rp 120 trillion.

“The achievement has been supported by excessive demand for sukuk in the domestic market,” Dahlan said in Surabaya on Thursday.

“The potential for state sukuk in the country is developing rapidly, given that 80 percent of Indonesians are Muslims and there remains large potential for them to become investors.”

Indonesia has been selling conventional and Islamic bonds during the past year to help plug its growing budget deficit. The country’s budget shortfall is forecast to reach 2.23 percent of the gross domestic product this year, according to a revised 2012 state budget.

Read more at

http://www.thejakartaglobe.com/business/demand-for-local-sukuk-excessive-with-more-likely-ahead-official-says/522996

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