Saudi Arabia Lists Government Debt Instruments Exceeding $54 Bn

Tadawul’s CEO Khalid Abdullah al-Hussan and President of Saudi Arabia’s Debt Management Office Fahad al-Saif during the press conference on Sunday, April 8, 2018. Asharq Al-Awsat

Saudi Arabia's financial market has witnessed a new stage of development and creation of more investment channels.

The Kingdom has started to include government debt instruments, in a move that will deepen the sukuk and bond markets and open up greater horizons for different segments of investors.

The Saudi Stock Exchange (Tadawul) began trading local currency government bonds on Sunday, in the latest move by authorities to deepen the Kingdom’s capital markets.

The trading of 45 government debt instruments worth SR204 billion ($54 billion) was officially launched at a press conference on Sunday by Tadawul CEO Khalid Abdullah al-Hussan and President of Saudi Arabia’s Debt Management Office Fahad al-Saif.

In a press conference held in Riyadh, Saudi officials affirmed that the inclusion and circulation of debt instruments issued by the Saudi government represents a new phase of financial market development phases and an increase in the level of investment opportunities, achieving the Kingdom’s Vision 2030, which calls for providing a sophisticated financial market and open to the world.

Hussan described the listing of government debt instruments as “an important step in the development plan of the sukuk and bond market,” which comes in line with Vision 2030.

“Listing government debt instruments will undoubtedly deepen the sukuk and bond market, which in turn will help boost liquidity in the secondary market and make debt instruments more attractive for both investors and issuers,” he said.

For his part, Saif said that the listing of government debt instruments on Tadawul “is a key pillar of the Saudi government’s strategy to make the Kingdom a global investment powerhouse.”

The circulation of government debt instruments enhances the expansion of the investor base and diversifies their segments to invest in these instruments, he added.

Notably, the market value of debt instruments account for almost 50 percent of the Saudi bourse's market capitalization, an it is likely to grow and reach the normal size by the end of 2019.