Government set the new retail sukuk coupon at 6%

JAKARTA. Starting from today, the government will offer the new series of retail sukuk (sukri), namely retail sukuk series SR-009.

However, do not be surprised, as the government sets the coupon for the new sukuk at the lower rate than the market expectations. “The coupon of SR-009 is at the rate of 6.9%,” said the Director of Sharia Financing at the Directorate General of Financing and Risk Management at the Ministry of Finance Suminto, Sunday (26/2).

In fact, some analysts have predicted that the new instrument would be attractive for the investors, if the government offers the coupon rate at 7%-7.5%. However, some predict that SR-009 would remain attractive for the investors, despite of the low coupon rate.

The Director of Distribution & Service of Bank Syariah Mandiri (BSM) Edwin Dwidjajanto said, the SR-009 would be attractive, as the new instrument offers a coupon with a higher rate than deposits interest rate. In average, the deposits interest rate in February stands at the level of 6.1%. This year, BSM is received a quota of SR-009 sales for Rp 750 billion.

SR-009 also offers a lower tax rate compared with the deposits profit sharing. The tax rate for SR-009 and the deposits profit sharing are 15% and 20%, respectively.

Senior Research & Investment Analyst of Infovesta Utama Wawan Hendrayana estimates, the government has considered the plan of BI (the Central Bank) to increase the interest rate in determining the coupon rate of SR-009 that is lower than the rate of the previous retail sukuk series SR-008.

Fixed Income Fund Manager at Ashmore Asset Management Indonesia Anil Kumar also estimates that the new retail sukuk would remain attractive for the investors, mainly for those who have just started involving in the investment. Conversely, the investors, who have been investing in other types of the government’s bonds, are unlikely to be interested on SR-009. “However, the deposits investors will defenitely be attracted to shift their investment instruments to retail sukuk,” Anil analyzed.

Fund Manager at Capital Asset Management Desmon Silitonga added, SR-009 remains attractive with the spread of 75100 bps above banking deposits interests. Another benefit is, the investors can release SR-009 to the secondary market after one period of coupon collection to reap profits from the price rise.

“Despite of the negative catalysts, historically, the retail bonds will always increase minimum by 100 bps above the par 100,” Desmon said. He also predicts that retail sukuk, which are released by the retail investors, will remain attractive for the institution investors. Understandably, if they are bundled to be the multi funds, the profits of the investments will be imposed tax with the rate of only 5%. (Muhammad Farid/Translator)