Total funds raised from Sukuk and debt instrument offerings in the Saudi market increased by 35% to SAR 40.43 billion

By: Mamdoh Almalki

The total funds raised from Sukuk and debt instrument offerings increased by 35%, bringing the total funds raised to SAR 40.43 billion at the end of the year. The Sukuk and debt instrument market in the Kingdom recorded remarkable growth, with the total value of issuances increasing by 20% to SAR 663.5 billion. This is a direct reflection of a package of regulatory improvements adopted by the Capital Market Authority.

This package is the largest since the market’s launch and aims to accelerate issuers’ access to financing, expand the investor base, and enhance liquidity and competitiveness, contributing to sustainable market growth.

Developments included regulating market making activity, licensing the first alternative trading service provider for Sukuk and debt instruments, and including five financial institutions in the Primary Dealer Program, which contributed to revitalizing and deepening the market. These results were included in the Capital Market Authority’s 2024 annual report, which demonstrated the continued momentum of the Saudi financial market, achieving record numbers across various regulatory, legislative, and developmental aspects. This enhances the market’s attractiveness to local and international investors and supports the goals of Saudi Vision 2030.

During the year, the Authority also approved 60 public offering applications, a 36.4% increase compared to the previous year. These applications included 40 applications in the parallel market and 16 in the main market. Forty-four listings were completed. Net foreign investment rose to SAR 218 billion, while foreign investor ownership reached SAR 423 billion, representing 11% of the total free float shares on the main market.

The Authority concluded 121 cases during the year, and compensation for affected investors amounted to more than SAR 389 million, benefiting 921 investors. The average litigation period decreased to 4.4 months. It is noteworthy that the Capital Market Authority issued the “Strategic Directions for the Development of the Sukuk and Debt Instruments Market” document, which includes 16 strategic initiatives to enhance the attractiveness and efficiency of the sukuk and debt instruments market and enhance its competitiveness regionally and internationally. This initiative aims to develop the legislative environment, incentives, and infrastructure to encourage issuers to issue sukuk and bonds locally, in addition to promoting trading in these instruments and encouraging investors to invest in them.

To measure the performance of the strategic initiatives, the Authority will monitor several strategic indicators, including the percentage of funds raised from sukuk and debt instruments to total public financing, the size of the debt instruments market as a percentage of GDP, the debt instruments turnover rate, and the percentage of international investor ownership in the debt instruments market.