Best Indonesia Funds Buy Retailers on Spending: IslamicFinance – BloombergIndonesia’s best-performing Islamicbond funds ar...
because of its growth prospects, he said, declining to givedetails on the fund’s current holdings due to company policy.“T...
The notes returned 0.3 percent in 2013 after gaining 9.6percent last year, according to the HSBC index. That compareswith ...
To contact the reporter on this story:                                   Yudith Ho in Jakarta at                          ...
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Best Indonesia Funds Buy Retailers on Spending: Islamic Finance – Bloomberg

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Best Indonesia Funds Buy Retailers on Spending: Islamic Finance – Bloomberg

  1. 1. Best Indonesia Funds Buy Retailers on Spending: IslamicFinance – BloombergIndonesia’s best-performing Islamicbond funds are buying sukuk of construction and retail companiesto take advantage of the government’s $300 billion developmentprogram, after sovereign yields dropped to a record.PT Samuel Aset Manajemen’s SAM Sukuk Syariah Sejahtera (SASUSYS) fund,which posted the biggest returns at 12 percent last year, plansto more than double corporate holdings to 50 percent of totalinvestments in 2013, Herbie Mohede, the fixed-income manager,said in an interview. Borrowing costs on government Shariah-compliant notes due 2018 declined 69 basis points in the pastthree months to 5.32 percent yesterday and touched an all-timelow of 5.24 percent on Jan. 9.President Susilo Bambang Yudhoyono announced on Dec. 18 atwo-year initiative to boost growth in Southeast Asia’s biggesteconomy by building roads, ports and factories. McKinsey & Co.in New York predicts retail spending in urban areas willincrease an average 7.7 percent annually to $1.1 trillion by2030. PT Danareksa Sekuritas and PT Indo Premier Securities, thenation’s largest sukuk arrangers, forecast sales of the debt bylocal companies will surpass the 2008 record of 2.3 trillionrupiah ($236 million) this year.“We have to start looking at corporate sukuk as the yieldson government notes keep falling,” said Jakarta-based Mohede,whose company oversees 900 billion rupiah, said on Jan. 23. “Welike the demographic play; that is looking at which sectors willbe driven by the population and growing wealth, especiallyconsumers and construction.”‘Rising Interest’PT Lautandhana Investment Management’s Lautandhana ProteksiSyariah I (LAUPSYI), the second-best performer with an 11 percent advance,also plans to raise holdings of construction and retail firms,said President Director Irvin Patmadiwiria in a Jan. 23interview. The fund oversees 1.6 trillion rupiah.He is looking to buy a debut sukuk from toll-road operatorPT Citra Marga Nusaphala Persada (CMNP) scheduled for this quarter 1/4
  2. 2. because of its growth prospects, he said, declining to givedetails on the fund’s current holdings due to company policy.“This is the year of consumers and construction, the mainsectors supporting the bulk of economic growth,” said Jakarta-based Patmadiwiria. “A bigger sukuk market would spell betterreturns for us as supply is the main issue. Rising interest inShariah investing isn’t yet matched by increased issuance.”Indonesian companies, including developer PT Adhi Karya andtelecommunications provider PT Indosat, sold a total of 2trillion rupiah of notes that comply with the Koran’s ban oninterest in 2012, finance ministry data show. In Malaysia,issuance reached a record 95.8 billion ringgit ($31 billion).Debut SukukPT Adira Dinamika Multi Finance, which provides personalloans for cars and motorcycles, is seeking to raise 500 billionrupiah in a debut offering in February to help boost Shariah-compliant financing to 9 trillion rupiah this year from 6trillion rupiah in 2012, President Director Willy Suwandi Dharmatold reporters yesterday.PT Sumberdaya Sewatama, which leases construction equipment,sold 200 billion rupiah of five-year Shariah-compliant bonds ata coupon rate of 9.6 percent in November, the prospectus shows.Biscuit-maker PT Mayora Indah (MYOR) issued similar-maturity sukuk inMay after offering an indicative rate of 8.25 percent, accordingto the sales document. Bloomberg has no pricing for the notesbecause they aren’t actively traded.Global sukuk sales total $3.7 billion in 2013, comparedwith $6.3 billion in the same period last year, according todata compiled by Bloomberg. Issuance reached a record $46.3billion in 2012.Average yields on the debt dropped four basis points, or0.04 percentage point, to 2.77 percent this year, theHSBC/Nasdaq Dubai US Dollar Sukuk Index shows. The premium onthe bonds over the London interbank offered rate, or Libor,narrowed 22 basis points to 160 basis points.Good Quality 2/4
  3. 3. The notes returned 0.3 percent in 2013 after gaining 9.6percent last year, according to the HSBC index. That compareswith the 0.4 percent decline for debt in emerging marketsfollowing an 18.5 percent advance in 2012, JPMorgan Chase &Co.’s EMBI Global Composite Index shows.The Bloomberg-AIBIM Bursa Malaysia Corporate Sukuk Index ofringgit-denominated issues rebounded 0.4 percent last week to102.5018, after dropping 0.3 percent in the previous five days.The Southeast Asian nation is the world’s biggest market forShariah-compliant notes.“Indonesian funds are still finding it difficult to buygood-quality company sukuk,” I Made Adi Saputra, a fixed-incomeanalyst at PT Nusantara Capital Securities, said in an interviewfrom Jakarta yesterday. “Corporate notes are more attractive inthis low-yield environment, provided the funds can find papersto invest in since demand continues to exceed supply.”Following TrendPT Mandiri Sekuritas, which oversees Mandiri Investa DanaSyariah, the third-best performing fund in 2012 with a return of8.4 percent, didn’t respond to e-mails seeking comment.The top fund, run by Mohede, posted a gain in 2012 that wasalmost double the 7 percent average of 91 local peers, whichit’s beaten every year since inception in 2010, data compiled byBloomberg show. It held notes sold by PT Perusahaan ListrikNegara, the state-owned power company, and palm-oil producer PTSalim Ivomas Pratama (SIMP) as of November, according to a Nov. 30statement. Consumer goods firms amounted to almost half ofcorporate investment.Islamic banking assets in Indonesia increased 36 percent to180 trillion rupiah in 2012 as of November from a year earlier,the latest central bank data show.“There is plenty of money in the financial system rightnow, so I expect yields in general to keep declining moderatelyor at best stay near current levels,” said Mohede at SamuelAset. “Corporate sukuk will follow that trend eventually, whichis why we would be eager to buy while yields are stillattractive and hold them to maturity.” 3/4
  4. 4. To contact the reporter on this story: Yudith Ho in Jakarta at yho35@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net Source Article from http://www.bloomberg.com/news/2013-01-29/best-indonesia-funds-buy-retailers-on-spending-isl amic-finance.html Waddywood.com Best Indonesia Funds Buy Retailers on Spending: Islamic Finance – Bloomberg 4/4Powered by TCPDF (www.tcpdf.org)

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