Saudi Stock Exchange joins widely followed FTSE bond index

Saudi Stock Exchange joins widely followed FTSE bond index

Saudi Arabia’s Stock Exchange will be added to its widely followed Emerging Markets Government Bond Index (EMGBI), the global index provider FTSE Russell announced on Thursday.

This came as a result of the tangible developments and efforts made by the Capital Market Authority (CMA), in addition to its efforts with the relevant authorities in developing the Sukuk and Debt instruments market. It took only six months since joining the list of monitoring of the index in March 2021 until its actual accession to the index on September 30.

The accession to the index will allow the Saudi Sukuk and Debt instruments to be part of the sukuk and debt instruments market indicators that international investors follow.

Categories of investors in the local market in 2018, and foreign investors were allowed to invest directly in debt instruments during the year 2020, and during the same year, issuers wishing to offer debt instruments were exempted from paying the financial compensation collected to the Authority when submitting an application for registration, studying the application and upon registration.

Additional channel for foreign investors

Until the end of 2025, and in 2021, the Authority approved the instructions for international securities depository centers; which provided an additional channel for foreign investors to invest in the local sukuk and debt instruments market.

Among the most prominent efforts taken by the CMA in coordination with the relevant authorities; within the framework of the (financial sector development) program; which is one of the programs of the Kingdom’s Vision 2030; is the reduction of the nominal value of government debt instruments to 1,000 riyals in 2019; and the restructuring of the financial compensation for services related to registration; listing and trading in the Sukuk as well as Debt Instruments Market by the Saudi Tadawul Company.

In 2020, a new special index also created in the local Sukuk and Debt Instruments market; and the new index launched on the Saudi Tadawul website.

The CMA seeks to contribute to achieving the goals of the Kingdom’s Vision 2030; through the Financial Sector Development Program. And in light of its strategic plan and its main pillars concerned with developing the market for Sukuk and Debt Instruments; and creating an attractive environment for all categories of local and international investors. Its efforts contributed to raising foreign investors’ ownership of sukuk and debt instruments to 223%; during the first half of 2020 until the second half of 2021.

The Saudi stock market completed its accession to the most important emerging market indices at the beginning of 2020; by joining the MSCI Emerging Markets Index (MSCI); the FTSE Russell Index, and the S&P Index.