124
3. Lack of understanding of ICM among corporates (i.e. unfamiliarity with Islamic
structures and principles).
Given the aforementioned reasons, Indonesia’s corporate bond market has remained relatively
small; total corporate bond issuance came up to USD8.7 billion as at end-2016, compared to
USD47.4 billion for sovereign bonds. Of the total, corporate sukuk issuance only accounted for
a mere 3.7% in 2016 (or USD0.32 billion), (end-2015: USD0.70 billion) (refer to Chart 4.36).
The government and regulators are aware of the importance of growing the corporate bond
market, and are taking the necessary measures to provide viable stimuli.
Chart 4.36: Indonesia’s Corporate Sukuk vs Conventional Issuance (2006-June 2017)
Sources: Bloomberg, OJK, RAM
Due to the declining trend in LCY corporate sukuk issuance, outstanding corporate sukuk only
accounts for a miniscule 1% of total outstanding private debt securities, as depicted in Chart
4.37.
Chart 4.37: Indonesia’s Corporate Sukuk vs Conventional Outstanding (2006-June 2017)
0.00
5.00
10.00
15.00
20.00
25.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 June 2017
USD billion
Sukuk outstanding Conventional outstanding
RM4.5
billion
RM23.2
billion
0.3%
Sources: Bloomberg, OJK, RAM