Saudi debt market valued at $213 billion, says official

The Chairman of the Board of the Saudi Capital Market Authority, Mohammed El-Kuwaiz, said on Sunday that the size of the debt market in the Kingdom has doubled to reach 800 billion Saudi riyals ($213bn), compared with around 400bn riyals ($106bn) in 2019. El-Kuwaiz made his comment during the Debt Markets and Derivatives Forum in Riyadh.

He predicted that the debt market in the Kingdom will double again over the next five years to meet the financing requirements that the Kingdom needs and added that, although the debt market is still in its infancy, its volume of financing exceeded the volume of financing through the stock market in 2021.

The launch of the Kingdom’s Vision 2030 and the acceleration of projects and requirements in the country led to a change and growth in the rates of demand for loans, said the official. This became faster than the demand for deposits, and thus the time became right for the establishment of the debt market.

Highlighting the development of financing as it moved from bank financing to financing through stocks, he said that the country has witnessed great leaps in the stock market, pointing to the major role it has played in financing during the past years.

Nevertheless, El-Kuwaiz indicated that the debt market in the Kingdom still constitutes less than 20 per cent of the size of the economy, specifically about 18 per cent, indicating that compared with other countries similar to the Kingdom, it is expected to represent more than 30 per cent of the size of the economy.

He explained that although the debt market in Saudi Arabia has become more open to foreign investors compared with the stock market, the percentage of foreign participation in local debt is not large.

This year’s forum was launched with the participation of regional and international leaders and experts. It is organised by the Financial Academy, and its objectives include exploring the latest economic developments and transformations in investment strategies both locally and regionally. Moreover, it is sponsored by the Saudi Capital Market Authority, along with sector leaders, experts and specialists in the field of securities.

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