The Volume of Issuance of Government Islamic Securities SR-007 Series, 2015–2018

Abstract

In Islamic finance, Sukuk instruments are similar to the bond market in conventional finance and are intended to increase long-term investment capital. However, according to Sharia, Sukuk means there is no uncertainty (Garar), interest (usury) and gambling (Maisir).This is also new in the financial market in Islamic Bank. The government uses Sukuk as an instrument for financing the state budget, and Sukuk financing has contributed to the development and financing of state projects. The amount of Sukuk issuance volume is influenced by external factors such as macroeconomic conditions and internal factors, namely prices and yields of Sukuk. The problem is whether inflation, exchange rates, Sukuk prices and returns affect the volume of Sukuk issuance. Therefore, this research aims to determine the effect of macroeconomic variables (inflation and exchange rates), Sukuk prices and Sukuk yields on the volume of Retail Sukuk issuance in Indonesia, using the Vector Error Correction Model (VECM) research model and the assistance of econometrics EViews 9. The data used in this study are time-series data from April 2015 to March 2018, with a research sample of Retail Sukuk with the latest maturity in March 2018, namely Retail Sukuk SR-007 series. The results of the study show that the inflation and price variables have a long-term significant influence on the volume of Retail Sukuk SR-007 issuance and only yield variables that do not influence both the long- and short-term, while the exchange rate variable has significant long- and short-term effects.

Constraints and strategies for municipal Sukuk issuance in Indonesia

“…Thus, its transaction is not a loan agreement but an investment. At its core principle, Sukuk is the same as conventional bonds, the difference being that Sukuk must be in accordance with Sharia principles that are safe and free from usury, gharar and maysir (Shintyawati et al , 2020; Baita and Daud, 2019; Wardani et al , 2020). Compared to the conventional bond that is not asset-based and only deals with investment returns, Sukuk is related to the profit generated by the object being financed (Halim et al , 2020).…”

The Effect of Macroeconomics and the State Budget on State Sharia Securities in Indonesia

“…Inflation and price variables have been found to significantly influence the volume of retail Sharia security issuances, whereas exchange rate variables have a significant impact in both the short and long term. Yield variables, however, do not affect either period (Shintyawati et al, 2020). Exchange rate stability, foreign debt stability, and debt service stability have been identified as significant factors impacting outstanding Sharia securities (Boukhatem, 2022).…”