Saudi Arabia’s Sukuk and Debt Capital Market Booming, Surpassing SR30 Billion
In a remarkable development, Saudi Arabia’s sukuk and debt capital market has experienced significant growth since 2019, exceeding SR30 billion ($7.9 billion), as reported by the Kingdom’s Capital Market Authority.
Market Expansion and Growth Rates
The regulatory body disclosed that the market has seen an annual growth rate of 7.9 percent, with unlisted issuances demonstrating a particularly strong yearly growth rate of 9.6 percent.
The unlisted sukuk and debt capital market has expanded from SR72 billion in 2019 to approximately SR105 billion by the end of 2023. The total size of the corporate sukuk and debt capital market reached SR125 billion by the end of 2023, compared to SR95 billion at the end of 2019.
Increased Issuances and Market Activity
The number of companies issuing debt instruments has tripled by the end of 2023 compared to the end of 2019, according to CMA. In the final quarter of 2023 alone, the Kingdom’s sukuk and bond issuances rose 2.8 percent in value year over year, reaching about SR758.8 billion.
The growth was primarily driven by an increase in listed sukuk and bonds issued by the government, which accounted for 70 percent of the total at SR529.8 billion.
Commitment to Market Development
The Capital Market Authority has been instrumental in advancing these developments through its Sukuk and Debt Instruments Market Development Committee. The committee, led by the CMA chairman, has initiated various programs to enhance market liquidity and attract a diverse investor base.
Future Plans and Strategic Initiatives
Looking ahead, the CMA aims to continue market development through 16 strategic initiatives focused on improving the legislative environment, incentives, and infrastructure to make the market more appealing to issuers and investors. Key measures include easing regulatory frameworks, introducing sustainable bonds, and expanding the REPO framework to include debt capital market instruments.
These efforts are geared towards enhancing the regional and international competitiveness of the sukuk and debt capital market, ultimately contributing to Saudi Arabia’s broader economic growth and diversification objectives.
Capital Market Advancement and Economic Growth
Saudi Arabia is dedicated to advancing its capital market by encouraging private sector involvement and attracting foreign institutional investors to support key projects in the country.