Saudi Arabia Boosts Access to Local Bond Markets
In a move to enhance access to its local bond markets, Saudi Arabia has appointed five new financial institutions as primary distributors of government debt instruments.
New Additions to the Primary Dealers Program
The Ministry of Finance and the National Debt Management Center have signed agreements with Albilad Investment Co., AlJazira Capital Co., Al Rajhi Capital Co., Derayah Financial Co., and Saudi Fransi Capital Co. These institutions now join the existing roster of local financial entities in the primary dealers program.
Diversifying the Investor Base
By expanding the primary dealers program, Saudi Arabia aims to diversify the investor base and provide enhanced opportunities for investors to participate in the local debt market through additional distribution channels.
International Firms in the Program
International firms such as BNP Paribas, Citigroup, and Goldman Sachs are also part of the program, alongside J.P. Morgan and Standard Chartered Bank.
Enhancing Market Liquidity
The Saudi debt market has seen significant growth and increased investor participation, with government initiatives focusing on enhancing market liquidity and attracting diverse investor interest.
Streamlining Regulations for Market Accessibility
The Capital Markets Authority has proposed a new set of reforms to facilitate access to Saudi Arabia’s debt market for development funds, banks, and sovereign wealth organizations. These reforms aim to streamline regulations, enhance market accessibility, and stimulate growth.
Driving Economic Development
With Vision 2030’s economic goals in mind, Saudi Arabia’s debt market evolution is expected to surpass developments in mature markets, driven by government-related entities, major financial institutions, and prominent corporate entities.
Recent Sukuk Program Issuance
The NDMC recently concluded an issuance under Saudi Arabia’s Government SR-denominated Sukuk Program, allocating a total of SR4.41 billion ($1.18 billion) across three tranches to diversify funding sources and support the Kingdom’s economic development efforts.