Indonesia have the largest muslim population but Islamic finance is underdeveloped. So, Indonesia government see this as a great opportunity for bond market. In the last few years many infrastructure was funded by Islamic bonds or Sukuk. It can reach broader investor that have desired to invest but in the Islamic principle.
Sukuk (previously known as shariah bond) is the plural form of the Arabic word “sakk”. According to Bapepam-LK Rule Number IX.A.13 concerning Issuance of Sharia Securities, sukuk is shariah securities in a form of certificate or proof of ownership that have the same value and represent participation unit that is not separated from or consist of:
- The ownership of particular tangible assets;
- The beneficial value or services of particular project’s assets or particular investment activities; the ownership of particular project’s assets or particular investment activities.
- Services (al khadamat) that have already existed or will be exist;
- Particular project assets (maujudat masyru ‘mu’ayyan); and/or
- Investment activities that have already been determined (nasyath ististmarin khashah)”.
Ministry of Finance officially announce Sukuk Tabungan ST-003 on February 1st2019 and the offering will ended on February 20th2019. The characteristics are especially for Indonesian citizen only, managing investment with syaria principle, having early redemption facilitate, and cannot . Minimum interest rate of return (IRR) 8,15% annually (floating with floor) depend on BI 7 Days Reverse Repo Rate, 2 years of tenor. We can buy this sukuk at minimum IDR 1 million until IDR 3 billion.
If we just learn about being investor, ST-003 may be the right option for you to invest. Those who have low risk appetite this kind of investment will fit for us. There are several reasons for invest first off all your investment and return guaranteed by Indonesian government, interest rate of return higher than time deposit product in all government Banks, coupon payed monthly, online transaction for your effectiveness and efficiency, and lastly we are support financing to national infrastructure development.
Simulation of ST-003 return with minimum 8,15% (BI 7 days reverse repo rate (6,00%) + spread 215bps (2,15%). First simulation, BI 7-days reverse repo rate (DRRR) increase 25 basis points (bps) on April 2019, so IRR apply on June-August 2019 will be 8,40% per annum because 6,00% + 25 bps (0,25%) + 215 bps (2,15%) = 8,40%. Second simulation, we have got BI 7-DRRR decrease at 5,7% on April 2019, so IRR apply on June-August 2019 will be 8,15%. Why is not 7,90% per annum (5,75% + 215 bps spread)?, it because 8,15% is minimum rate of return for ST-003.