IslamicFinance.de

Indonesian and Malaysian Islamic bonds are diverging as cheaper oil has opposite impacts on fiscal budgets. The yield on Indonesia’s US dollar Sukuk due 2022 fell to a 21-month low of 3.72 per cent in February, while Malaysia’s 2021 debt yield climbed to 3.05 per cent. Default risk for Indonesia has dropped nine basis points this year to 148, while that for Malaysia rose 15 to 121 just as both nations plan US currency global offerings before the Federal Reserve starts raising interest rates. Barclays Plc forecast a sovereign credit upgrade for Indonesia after an overhaul of a decades-old fuel-subsidy program last month. Malaysia, the region’s only major crude exporter, is contending with a drop in revenue and a higher budget-deficit target, prompting Fitch Ratings to warn of a possible rating downgrade.