Indonesia Waiting for ‘Window’ to Sell Dollar Islamic Bonds

Indonesia is waiting for the right timing to proceed with its second international offering of Shariah-compliant bonds, Dahlan Siamat, director of Islamic finance at the government’s debt management office, said today.

“We are waiting for a window,” Siamat said in a telephone interview from Jakarta. “We are still watching market movements.” He declined to elaborate.

Dwi Irianti Hadiningdyah, deputy director at the debt management office, said Oct. 17 Indonesia may sell $500 million of global Islamic bonds this year.

The nation sold $650 million of dollar-denominated Shariah- compliant debt, or sukuk, in April 2009. The yield on the 8.8 percent notes due April 2014 dropped 11 basis points, or 0.11 percentage point, to 3.35 percent today, according to prices from Royal Bank of Scotland Group Plc.

Average yields on global sukuk, which pay returns from assets to comply with Islam’s ban on interest, climbed 14 basis points in the first three days of this week, the HSBC/NASDAQ Dubai US Dollar Sukuk Index shows.

To contact the reporter responsible for this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net.

To contact the editor responsible for this story: Sandy Hendry in Hong Kong at shendry@bloomberg.net.

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