Saudi Arabia Concludes Second Government Sukuk Savings Round
Saudi Arabia has wrapped up its second government sukuk savings round for March, with a total volume of requests hitting SR959 million ($255.7 million) and allocated to 37,000 applicants.
The National Debt Management Center announced that the financial product, known as Sah, offers a return of 5.64 percent, with a maturity date set for March 2025.
Next Steps for the Savings Round
Looking forward, the third savings round is scheduled for April 21, according to the official calendar for government sukuk.
Participants can access the reserve window through digital channels provided by their financial institutions, showcasing Saudi Arabia’s dedication to embracing digitization.
Initiative in Financial Sector Development Program
Sah, introduced by the Ministry of Finance and the National Debt Management Center, is part of the Financial Sector Development Program under Vision 2030. It aims to boost fund ratios among individuals by encouraging periodic savings.
The initiative also seeks to increase the supply of savings products, enhance financial literacy, and emphasize the importance of savings for future plans.
Global Trends in Sukuk Issuance
A report by S&P Global predicted that global sukuk issuance could range between $160 billion to $170 billion in 2024, driven by increased needs in core Islamic finance countries.
In 2023, global Islamic bond issuance fell by 6.1 percent to $168.4 billion, attributed to tighter conditions in Saudi Arabia’s banking system and Indonesia’s lower fiscal deficit.
Rise of Sustainable Sukuk Issuance
S&P Global also suggested that sustainable sukuk issuance will rise in 2024, following the success of the UN Climate Change Conference (COP28) held in the UAE last year.
Fitch Ratings forecasted that the ESG market for Shariah-compliant tools is expected to exceed 7.5 percent of global outstanding Islamic bonds in the near future, propelled by issuers’ diversification plans and governments’ sustainable initiatives.