Mubasher: Indonesia plans to explore new sharia-compliant investment opportunities to deploy part of its $8 billion Hajj funds.
The Southeast Asian nation’s hajj fund management agency (BPKH) has accumulated IDR 111 trillion ($7.9 billion) as the holy pilgrimage waiting list extends to 15 years, Bloomberg reported citing official data.
Due to the limited sharia-compliant investment opportunities in Indonesia and a law curbing direct investment to 20% of the corpus, the agency is seeking new avenues abroad, a member of the board of BPKH said.
“We have the potential to reach 10% direct investment, but it’s unlikely for us to execute all of those in pipeline this year,” Beny Witjaksono added.
In case of increasing direct investments, the agency has to reduce its investments in Islamic bonds, BPKH’s board member added, noting that the Hajj fund might be raised to IDR 121 trillion by the end of 2019 with an expected average return of 6.5%, Witjaksono noted.
About IDR 6 trillion worth of Islamic bonds held by BPKH will be due this year and can be used for direct investment, he said.
The Saudi government has set the Southeast Asian nation’s Hajj quota at 221,000 in 2019, the largest contingent of Muslim pilgrims.