Government upsizes sukuk sales as bids hit record high

The first sukuk auction this year, held on Tuesday, attracted incoming bids of Rp 13.7 trillion (US$1.1 billion), representing a more than sixfold oversubscription, with the government having set an issuance target of Rp 2 trillion. In comparison, incoming bids in the previous sukuk auction on Oct. 21 barely reached Rp 3.5 trillion. In response to the high demand, the Finance Ministry then decided to upsize the issuance, selling Rp 6.8 trillion of sukuk bonds. Nevertheless, the government will first assess upcoming auction results before deciding to raise more financing from sukuk this year. The high demand could be a seasonal phenomenon due to the market’s long closure for the year-end holiday.