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IHS Markit includes Saudi government bonds to iBoxx index

iBoxx index

Saudi Stock Exchange (Tadawul) said in a tweet Wednesday that IHS Markit had included the Saudi government Sukuk market in its iBoxx global government bond index.

The inclusion will help the sukuk and debt instruments market indices to be followed by international investors, Saudi Capital Market Authority (CMA) said in a statement.

CMA expected that a further 27 government debt instruments listed on Tadawul will join the index starting from January 31, 2022. This would be around 0.19% of iBoxx’s weight.

IBoxx index

The Saudi Press Agency (SPA) stated that the local stock exchange’s joining the iBooks index comes as a result pf the concrete developments in the sukuk and debt instruments market in the Gulf country.

The joining the iBoxx index, will allow Saudi Stock Exchange to be part of the indices of the sukuk and debt instruments markets followed by global investors.

IBoxx measures government bonds denominated in the local currency of more than 30 countries.

CMA has a strategy that includes developing the sukuk and debt instruments market and creating an attractive environment for all categories of local and international investors. The strategy contributed to raising foreign investors’ ownership of sukuk and debt instruments by 455% from the third quarter of last year to the third quarter of this year.

FTSE index

Last October, FTSE Russell announced that the Saudi stock market had joined the FTSE Frontier Emerging Markets Government Bond.

This came after several recent measures to develop the market for sukuk and debt instruments, especially the inclusion and circulation of government debt instruments for all categories of investors in the local market in 2018, and allowing foreign investors to invest directly in debt instruments during the past year.

During the same year, issuers wishing to offer public debt instruments were exempted from paying the financial consideration collected to the CMA upon submitting the registration application, studying the application, and upon registration, until the end of 2025.

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