King­dom to list riyal bonds on ex­change next Sun­day

Arab News - - BUSINESS -

strategy to make the king­dom a global in­vest­ment pow­er­house,” said Fa­had Al-Saif, pres­i­dent of the Saudi Debt Man­age­ment Office.

Au­thor­i­ties hope ex­change­based trad­ing of gov­ern­ment debt will help to ex­pand own­er­ship be­yond banks to in­sur­ers, mu­tual funds and even in­di­vid­ual in­vestors, mak­ing it eas­ier for the gov­ern­ment to fi­nance its bud­get deficit.

By cre­at­ing trans­par­ent bench­mark prices for debt, the trad­ing could also en­cour­age more Saudi com­pa­nies to is­sue cor­po­rate bonds, re­duc­ing their re­liance on bank lend­ing, which is high by in­ter­na­tional stan­dards.

In mid-2015, the gov­ern­ment be­gan of­fer­ing lo­cal cur­rency bonds in monthly auc­tions to help cover a huge bud­get deficit caused by low oil prices. It sus­pended those is­sues in late 2016 as banks strug­gled to ab­sorb so much debt and Riyadh be­gan to bor­row over­seas, but launched monthly sukuk is­sues in mid-2017.

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