Tadawul Stock Exchange Included in iBoxx Global Government Bonds’ Index

Th e global index provider IHS Markit announced the inclusion of the Saudi Stock Exchange Tadawul, in the iBoxx Global Government Bonds Index.

Joining the iBoxx government bond index comes as a result of the tangible developments, in the the sukuk and debt instruments market.

IHC Market announced in a statement that the Saudi financial market fulfilled the requirements to join the index, which includes many criteria, such as the openness of the financial market and the market value of governmental debt instruments.

It is noteworthy that the accession will allow the Saudi financial market to be part of the sukuk and debt instruments world market indices, followed by global investors.

Tadawul will constitute 0.19% of its weight and will constitute 2.20% of the iBoxx Index of government bonds for emerging countries, to which it belongs.

It should be noted that joining the index will be activated on January 31, 2022.

It is noteworthy that FTSE Russel announced, in October, that the Saudi stock market had joined the FTSE Emerging Markets Government Bond Index -EMGBI.

This came after several measures have been taken, during the past period to develop the market for sukuk and debt instruments, most notably the inclusion and circulation of government debt instruments for all categories of investors, in the local market in 2018, and allowing foreign investors to directly invest in debt instruments during the Year 2020.

issuers wishing to be exempted, in offering debt instruments as a public offering, from paying the financial charges collected upon submitting the registration application, studying the application and upon registration, until the end of 2025.

In 2021 the authority approved the instructions for international securities depository centers, that provided an additional channel for foreign investors to invest, in the sukuk market and local debt instruments.

Nominal value of government debt instruments was reduced to SR1,000 in 2019, and the financial charges were restructured for services related to registration, listing and trading in the sukuk and debt instruments market, by Tadawul.

During 2020, a new special index was created in the Sukuk and local debt instruments’ market, and the new index was launched on the Tadawul website.

CMA’s strategic plan includes developing the sukuk and debt instruments market, and creating an attractive environment for all categories of local and international investors, alike, which contributed to raising foreign investors’ stake of sukuk and debt instruments by 455% from the third quarter of 2020 until the third quarter of 2021.