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The Saudi Exchange is pleased to announce that IHS Markit, a leading information provider for financial markets, has included Saudi Government Sukuk market into the iBoxx Global Government Bond Index effective January 31st, 2022
The iBoxx Global Government Bond Index reflects the performance of sovereign debt instruments in local currencies for countries like Saudi Arabia, which has the fifth highest investment-grade credit rating from Moody's. This announcement comes shortly after the Saudi Exchange was added to the FTSE Emerging Market Government Bond index, which comes into effect in April 2022.
The announcement shows recognition of the Kingdom's efforts to develop, deepen and enhance the local debt market efficiency and diversity of its investor base. Over the past few years, Saudi Exchange has introduced a series of reforms aimed at improving market infrastructure and efficiency, expanding international investors’ access, enhancing corporate governance and increasing transparency. Developing an advanced capital market is a core pillar of the Financial Sector Development Program (FSDP), part of Vision 2030.
Mohammed Al Rumaih, CEO of Saudi Exchange, said: “Saudi Arabia’s addition in iBoxx Global Bond Index is a significant achievement and reinforces the importance of the strides forward that the Saudi Tadawul Group has made over the years to enhance its market infrastructure and offering to fit the needs of all types of investors.
Global investors are recognizing the enhancements made on Saudi Arabia’s debt market. Our debt market has grown to reach 451,695 million SAR in end of Q3 2021, which represents the large-scale activity that Government and its institutions have undertaken to develop various sectors in the Kingdom. We are very proud of this important milestone that will help bolster the attractiveness of the Saudi capital market to international investors.”
In 2020, Saudi Exchange launched two indices in collaboration with IHS Markit: the iBoxx Tadawul SAR Government Sukuk Index and the iBoxx Tadawul SAR Government Sukuk and Bonds Index. Both indices provide investors and other market participants with an insight into the performance of Saudi Sukuks and Bonds.
Demand from local and international investors has been robust since the Saudi Exchange began the listing and trading of debt instruments issued by the Government of the Kingdom of Saudi Arabia in April 2018. By the end of Q3 2021, a nominal traded value of more than SAR 24.6 billion of Saudi Government debt is traded on the Exchange and over 70 Government debt instruments are currently listed on the Exchange, while the total size of issuance for Sukuk/bonds is more than SAR 452 billion.
