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Financial Services Authority asks state enterprises to issue more sukuk
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Financial Services Authority commissioner Sardjito (left) speaks to reporters regarding the need for state-owned enterprises to look into sukuk as alternative financing for infrastructure projects. (JP/Anton Hermanto)
T
he Financial Services Authority (OJK) is looking for more sukuk issuance from state-owned enterprises (SOEs), especially those related to construction and infrastructure, an official has said.
Despite Indonesia leading in the issuance of sovereign sukuk, demand for corporate sukuk is relatively low, with 51 outstanding sovereign sukuk worth Rp 388.2 trillion (US$ 28.47 billion), in contrast to 45 outstanding corporate sukuk worth only Rp 9.5 trillion (US$ 700 million) as of May 20. From 45 corporate sukuk, only state electricity firm PLN, Adhi Karya and BNI Syariah issued the bonds.
"Whereas, sukuk is more stable, secure and we can use it to finance long-term projects," OJK commissioner Sardjito said on Wednesday.
Sardjito added that as 51 state enterprises were now involved in various infrastructure developments, the OJK hoped the firms would consider sukuk issuance as alternative financing for their projects.
He said the OJK provided some incentives, including reduced fees for sukuk issuance, compared to conventional bonds. Sardjito admitted that some sukuk regulations did not fall under the OJK, requiring other government institutions to take part.
"[The issuance of sukuk] must involve the tax office and the SOEs Ministry. The OJK cannot make state enterprises issue sukuk, but we are ready to help them," Sardjito said.
The OJK is also drafting a regulation with the Finance Ministry to create sukuk-based mutual funds, as investment management firms have called for the regulation to provide their investors greater access to sukuk. (dmr)
