Question
How active is the Saudi Debt Market? Saudi Arabia may now hold the record as the fastest sovereign Sukuk issuer in the history Islamic debt
How active is the Saudi Debt Market?
Saudi Arabia may now hold the record as the fastest sovereign Sukuk issuer in the history Islamic debt capital market (after its book building process lasted 14 hours and half) without the need to conduct roadshows but with such greatness comes array of challenges for its domestic debt capital market. In July 2018, Saudi Debt Management Office (DMO) introduced an issuance system, entailing the use of Dutch auction, which coincided with the yields on government Sukuk soaring across all traches.
What are the prospects of the Debt Market in Saudi Arabia?
Riyadh plans to follow up the opening of the Tadawul stock market to foreign investors, who could buy up to 10% of the available paper, by allowing external investment in the local debt market. The Capital Market Authority (CMA) is working on new rules to promote the local currency bond and sukuk market, which are expected to allow foreign investors to buy bonds for the first time. The CMA is examining a number of measures, including requiring ratings agencies that rate domestic securities to have a local presence, but its rule changes are not expected to be published until 2015.
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