GOVT ADVISED NOT TO ISSUE SHARIA BONDS NOW

Jakarta, March 12 (ANTARA) - Now is not a good time for the government to issue global retail Islamic bonds (Sukuk) because the world economy is still fraught with uncertainties, a market and economic analyst said.

"It is not an appropriate time for the government to issue global Islamic bonds amid the current economic uncertainties where risks have the potential to continue to develop," Chief economic and market analyst of Citicorp for Asia Pacific, Johanna Chua, said here on Thursday.
Besides, she said, many global companies or countries are issuing global notes to help fund their crisis-affected economies.
The economic analyst said that amid uncertain economic conditions, the government had to set high yields for its global Islamic bonds in order to be able to attract investors, let alone if the bonds carried a long tenure.
She said that a present almost all countries were competing to obtain funds from the global market. After all, the United States is also in need of funds to help recover its losses due to the on-going economic crisis.
"This is less favorable for us," she said.
According to Chua, it would be better for Indonesia to use facilities already made available by the International Monetary Fund (IMF).
"The facilities which are set aside for developing countries have not yet been utilized by developing nations. This can be used by Indonesia," she said.
The government is planning to issue sharia-based bonds to help plug its state budget deficit. Finance Ministry's fiscal policy head Anggito Abimanyu said recently the government had issued global bonds (SUN) in order, among others, to help cover the budget deficit of Rp139.5 trillion.
According to the director for sharia financing of the directorate general of debt management affairs of the Ministry of Finance, Dahlan Siamat, the government has planned to issue retail Islamic bonds since 2008 but it has not yet been realized until now.
He said that global retail Islamic bonds had some Rp7 trillion worth of underlying assets.
This bonds, he said, are designed for institutional investors.